Sizwe Medical Fund’s (“Sizwe”) national scale ZAR currency claims paying ability rating has been reaffirmed at A+ (single A plus). The rating has also been maintained on Rating Watch.
Primary factors supporting the rating include Sizwe’s position as one of the larger open schemes in the industry. Barring F09, the scheme has achieved membership growth in each year over the review period. Sizwe’s efforts in containing relative non-healthcare expenditure were also positively noted. In this regard, the delivery cost ratio has tracked the industry average closely over the review period.
This notwithstanding, cognisance was taken of the fact that the scheme has reported large net healthcare deficits in each year over the review period. This trend has continued into 1H F11, with a further large net deficit posted (as a result of a deterioration in claims experience). However, as per historical patterns for the scheme, claims generally subside in the last few months of the year. Accordingly, the net healthcare result is expected to trend towards the full year budget by year end F11. Given the above, note was also taken of the declining trend in Sizwe’s statutory solvency ratio since F06, whilst the scheme’s key liquidity measures decreased for the sixth consecutive year, reflecting levels well below industry norms. Other key credit protection measures do, however, remain comfortable. Whilst investigations by the Council for Medical Schemes into certain governance issues remain ongoing, management has indicated that most of these concerns have been addressed.
Stephan Waurick https://globalratings.net/uploads/files/Aug_Insights_2011.pdf
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