Profmed retains A+ rating

International rating agency, Global Credit Ratings (“GCR”) has reaffirmed Profmed’s claims paying ability rating of A+ (single A plus), while the rating remains on positive outlook. The rating denotes a high claims paying ability, with good protection factors.

The rating took cognisance of Profmed’s demonstrated ability to post substantial positive bottom line results since F03, which has rapidly built up the scheme’s level of reserves. Moreover, notwithstanding the operating deficits recorded, budgets indicate that Profmed is likely to post another significant net surplus for F08. This has in turn supported robust solvency measures, which rose to review period highs in F07. To this end, the scheme’s international and statutory solvency ratios stood at a higher 57% in F07 (F06: 52%), well above the Act’s minimum requirement. Sheri Few, senior GCR analyst, also noted that the scheme displays strong liquidity levels, supported by realised profits and its conservative investment of assets.

Profmed’s delivery costs to GPI ratio is, however, higher than the norm for the closed medical schemes industry, although it is expected to improve in the medium term once all exogenous costs from moving administrators cease. The decrease in this ratio for the year to date was also considered. The relatively stagnant membership levels and the concomitant rise in the average age of the scheme over recent years were noted. However, the growth initiatives embarked on, which have proved successful to date, are expected to have positive implications for the scheme in the medium to long term.