5 October 2012: Following the most recent rating review in June 2012, Global Credit Ratings (“GCR”) reaffirmed Medshield Medical Scheme’s (“Medshield”) domestic claims paying ability rating of AA-(ZA), with a stable rating outlook.
According to GCR, factors underpinning the rating included the scheme’s achievement of a second consecutive net surplus in F11, supported by the containment of relative delivery costs. As at FYE11, Medshield’s solvency metrics remained strong, with statutory solvency recorded at 37% and is forecast to remain stable at 36% in F12. This is comfortably above the minimum regulatory requirement of 25%. The scheme’s relatively prudent investment strategy was also noted, and continues to support adequate liquidity metrics. Furthermore, the absolute quantum of capital (in excess of R1bn) and total invested assets (in excess of R1.5bn) was favourably considered.
While note is taken of the recent placement of the scheme under provisional curatorship on 2 October 2012, GCR has taken a positive view regarding this development, as it is expected to lead to a strengthening in governance protocols. GCR has also reviewed the scheme’s latest YTD management accounts and notes that Medshield had recorded a R38m net surplus as at August F12 (full year budget F12: R39m), with statutory solvency remaining robust at an annualised 38%. In light of the aforementioned, the scheme is considered to have a very high claims paying ability.
CREDIT RATINGS ISSUED AND RESEARCH PUBLICATIONS PUBLISHED BY GCR, ARE GCR’S OPINIONS, AS AT THE DATE OF ISSUE OR PUBLICATION THEREOF, OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. GCR DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL AND/OR FINANCIAL OBLIGATIONS AS THEY BECOME DUE. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: FRAUD, MARKET LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND GCR’S OPINIONS INCLUDED IN GCR’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND GCR’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND GCR’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL OR HOLD PARTICULAR SECURITIES. NEITHER GCR’S CREDIT RATINGS, NOR ITS PUBLICATIONS, COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. GCR ISSUES ITS CREDIT RATINGS AND PUBLISHES GCR’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING OR SALE.
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