Community Medical Aid Scheme (“COMMED”) has elected to discontinue its contract with GCR, and so, the previously accorded claims paying ability rating of BBB- (triple B minus), Rating Watch, has been withdrawn.
Liberty Medical Scheme retains AA- rating
Liberty Medical Scheme’s (“LMS”) domestic ZAR currency claims paying ability rating has been reaffirmed at AA- (double A minus). The rating also remains on rating watch.
Following the amalgamation with Medicover at the beginning of F10, LMS’s reserve levels have more than doubled. Consequently, the scheme’s statutory funding ratio strengthened to a level above the minimum requirement as at FYE10. Note was also taken of the scheme’s strong brand, and access to the Liberty Group’s extensive distribution infrastructure. Key liquidity measures have increased subsequent to the merger, although it is noted that these ratios remain somewhat below industry norms.
Notwithstanding the above, cognisance was taken of the loss of members post FYE10, largely stemming from the migration of persal members. The age profile of the scheme is somewhat older than the norm for the open medical schemes industry, which presents a key challenge. Further, the substantial net deficit posted by the scheme in F10 was considered, although note is taken of the corrective risk management practices undertaken to improve this going forward (with a much smaller net deficit forecast for F11).
Sheri Few https://globalratings.net/uploads/files/June_2011.pdf
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