SA Logistix is a transport company that operates across South Africa. The company has a fleet of specialised vehicles to transport a wide range of products such as fresh foodstuffs, chemicals, and hazardous products.

The company is preparing for the annual insurance review. The Board of SA Logistix has instructed the Chief Financial Officer $($CFO$)$ and the Chief Risk Officer $($CRO$)$ to determine the appropriate risk financing strategies for the fleet. To determine the risk financing alternatives, the CRO recommended that the maximum probable yearly aggregate loss $($MPY$)$ must be calculated for the fleet.

The historical financial data of the fleet is incomplete and certain critical components need to be calculated. Claims inflation forms a significant component of the total claims cost per accident and for that reason it is important to include claims inflation in the data. For the purpose of this exercise, the CRO defined claims inflation as the administration cost and effect of exchange rate fluctuation. The board of Logistix stated in the last annual report that the company adopted a conservative risk appetite. Exchange rates have a significant effect on claims inflation as $40\%$ of claims cost is in foreign currency.

Refer to the table for the annual inflation rate and appropriate exchange rate. The historical information available for the fleet is as follows:

YEAR

ANNUAL INFLATION RATE

ZAR$/$USD

$\%$ OF CLAIMS COST IN FX

NUMBER OF VEHICLES

BUDGETED COST PER VEHICLE

NUMBER OF ACCIDENTS

AVERAGE DAMAGE PER ACCIDENT

CLAIMS ADMIN

$2013$

$4,56\%$

$11,2$

$40\%$

$120$

R $1800000$

$50$

R $100000$

R $9000$

$2014$

$4,89\%$

$12,5$

$40\%$

$120$

R $1900000$

$60$

R$120000$

$2015$

$5\%$

$13,2$

$40\%$

$120$

R $2000000$

$60$

R$135000$

$2016$

$5,32\%$

$15,9$

$40\%$

$150$

R $2100000$

$70$

R$150000$

$2017$

$5,42\%$

$15,8$

$40\%$

$150$

R $2200000$

$70$

R$170000$

$2018$

$5,75\%$

$16,7$

$40\%$

$150$

R $2300000$

$90$

R$200000$

$2019$

$5,83\%$

$17,5$

$40\%$

$150$

R $2700000$

$90$

R$230000$

$2020$

$7,13\%$

$19,8$

$40\%$

$150$

R $2750000$

$80$

R$255000$

$2021$

$7,43\%$

$20,6$

$40\%$

$150$

R $2800000$

$100$

R$270000$

$2022$

$7,80\%$

$22,5$

$40\%$

$150$

R $2850000$

$90$

R$300000$

Question

Calculate the total cost per event for the year $2013$ by incorporating the information provided in the table above.

a$.$

R$40000$

b$.$

R$60000$

c$.$

R$100000$

d$.$

R$109000$