Bestmed accorded strong credit rating by GCR

International rating agency, Global Credit Ratings ("GCR"), has reaffirmed Bestmed Medical Schemes ("Bestmed") domestic currency ZAR claims paying ability rating at AA- (double A minus).

The rating denotes a very high claims paying ability, with very strong protection factors.

According to Sheri Few, an analyst at GCR, the rating was supported by the schemes demonstrated ability to consistently post surpluses on both an operational and net level throughout the review period. Furthermore, notwithstanding the continued growth in the schemes membership base, cognisance is taken of the fourth successive increase in the international solvency margin to a review period high of 59% in F06. Few also added that despite the increase over the last three years, Bestmed has maintained a relatively low delivery cost infrastructure throughout the review period, which compares favourably with industry norms. The scheme displayed a substantial investment portfolio at the end of F06, although given the revised investment strategy cash coverage ratios decreased significantly. Cognisance was, however, taken of money market funds, which could be very easily liquidated. These totalled R163m, and if included in cash holdings would see the gross and net claims cash coverage ratios equate to a comfortable 7.9 months and 5.4 months respectively.

While the scheme has made some progress in diversifying its membership base away from the government sector, this concentration still remains fairly high. In addition, cognisance was taken of the relatively high average age of principal members in F06 compared to industry norms.