Announcements

GCR affirms Pro Sano’s rating at A+

Pro Sano Medical Scheme’s (“Pro Sano”) national scale ZAR currency claims paying ability has been reaffirmed at A+ (single A plus), whilst the rating has been maintained on Rating Watch.

In order to address the scheme’s deteriorating financial performance, various corrective risk management measures were applied for the 2010 benefit cycle. This resulted in a much smaller healthcare and net deficit being reported in F10, with a net surplus expected in F11. Pro Sano continues to exhibit relatively low delivery cost infrastructure compared to its peer group, with further sustainable cost advantages expected to be derived from the scheme’s recent move to self-administration.

F10 saw Pro Sano marginally dip below the 25% requirement for statutory solvency, however, management has indicated that this should be rectified by year end 2011. In addition, the more aggressive investment strategy adopted in F10 saw cash coverage ratios adversely impacted, which increases capital and liquidity risk, particularly given current global financial market uncertainty.

Cognisance was also taken of the fact while membership levels have remained largely intact over recent years, real net growth in members remains a key challenge for the scheme (particularly given its older membership age profile compared to industry norms). Thus, the continued appropriate structuring of benefits and pricing is key to ensuring that a positive operating performance is achieved going forward.

Sheri Few
https://globalratings.net/uploads/files/October_2011.pdf

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