Momentum Health's rating maintained at A+, placed on rating watch

Global Credit Ratings ("GCR"), an international rating agency, has reaffirmed Momentum Healths domestic currency ZAR claims-paying ability rating at A+ (single A plus). In addition, the rating has been placed on rating watch. This notwithstanding, the rating denotes a high claims paying ability, with good protection factors.

Following the amalgamation of National Medical Plan and Pulz Medical Scheme with effect 1 January 2005, the scheme was renamed Momentum Health. Momentum Health is administered by Sovereign Health, which is wholly owned by the Momentum Group Limited, a division of the FirstRand group. Since rebranding as Momentum Health, robust growth in membership was achieved during F06 (which has continued for the year to date). While note is taken of the fact that the scheme posted a net deficit in F06 (its first since F98), the sizeable net surpluses that have been recoded previously have supported reserve levels. Given the fairly aggressive investment strategy adopted for the past two years, liquidity levels have displayed a sharp reduction. However, the rating was further supported by the scheme's sizable investment portfolio, particularly the level of other investments totalling R397m (F05: R363m), of which a large portion are readily realisable.
 
According to Sheri Few, an analyst at GCR, cognisance was also taken of combined effect of the net deficit reported together with the rapid growth in membership experienced during the year, resulting in a contraction in the schemes solvency margins. In addition, further membership growth in F07, together with a further budgeted net deficit, is expected to result in a further drop in the solvency margin.