Suitability of the 2.5% net discount rate for quantum of damage calculations in South Africa

IF 0.1 Q4 BUSINESS, FINANCE
F. Koning, JP Swanepoel, JD Brits, E. Maré
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Abstract

This study is on the 2.5% real discount rate used to calculate the lump sum payment in the event of a compensation claim. The aptness of this 2.5% real discount rate is assessed through a statistical analysis of government bonds and inflation data over the past 59 years. The investigation yields evidence that the discount rate over the last 59 years may be mean reverting and would be a good approximation to use in the future. Also, an interesting relationship was found between the introduction of inflation targeting in the year 2000 and the stationarity of the series. It must be considered that the timing and duration of variation from the 2.5% cannot be predicted, but reversion to the series mean seems to always occur. The practice of using the 2.5% in the South African context is also compared to other practices globally. Finally, circumstances for the departure from the 2.5% discount rate are investigated, with some suggestions.
2.5%净贴现率在南非用于损失量计算的适用性
这项研究是在2.5%的实际贴现率用于计算一次性付款的赔偿索赔的事件。2.5%的实际贴现率是否合适,是通过对过去59年的政府债券和通胀数据的统计分析来评估的。调查得出的证据表明,过去59年的贴现率可能是均值回归,并将是一个很好的近似值,在未来使用。此外,在2000年引入通货膨胀目标制与该系列的平稳性之间发现了一个有趣的关系。必须考虑到,从2.5%变化的时间和持续时间是无法预测的,但似乎总是会发生向序列均值的回归。南非使用2.5%的做法也与全球其他做法进行了比较。最后,对偏离2.5%贴现率的情况进行了调查,并提出了一些建议。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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South African Actuarial Journal
South African Actuarial Journal BUSINESS, FINANCE-
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