Profmed has maintained an A+ rating for their claims paying ability in the 2009 financial year, according to the Global Credit Rating Co.
Profmed is the largest restricted medical scheme in South Africa exclusively for graduate professionals. The A+ rating that the scheme received remains the same as the previous year’s, which is noteworthy in the current economic climate. In addition, steps that the medical scheme has taken to address areas of concern to the medical aid have proven successful.
“We are well satisfied with the ranking that we have received,” says Graham Anderson, the Principal Officer of Profmed. “It’s been a tough year for business and for the medical scheme industry in particular, so we’re pleased to be able to affirm that we offer the financial stability to ensure the prompt payment of claims that our professional membership base demands.”
Increase in members' surplus
Profmed’s members’ surplus increased by 6% to R318 million, and the 45% statutory funding ratio remained well above the Medical Schemes Act’s minimum requirement. The Global Credit Rating Co’s report stated that certain key protection measures have remained sound, with reserves per principal member equating to R12 228 in the 2009 financial year, which is well above the open and restricted medical schemes’ average. Accumulated funds covered average monthly claims by a sound 5.9x.
Profmed has also continued to rally against competition from larger medical schemes, having launched an aggressive marketing campaign in 2007 to improve the scheme’s competitiveness through brand awareness. In order to do this, the medical scheme developed a dedicated internal broker consultancy division and a two-pronged sales strategy, targeted at individual and corporate customers.
“Our exclusivity makes it possible for us to offer affordable rates and comprehensive benefits to our scheme members, but we have to be continuously aware of fluctuations in the marketplace,” says Anderson. “It is imperative that we respond promptly to provide what our existing and prospective members want and need, to assure our continued success and maintain our high levels of service.”
Marketing campaign increased membership
Their marketing campaign increased membership by 1% to 23 939 in the 2008 financial year, and added another 607 members in 2009, bringing the total membership base to 24 546 at year end.
Profmed’s management will continue to market the scheme through the channels that have proven most successful, and anticipates a further 2% growth in members in 2010. Gross and net contribution income is expected to rise by 16% to R773 million, while healthcare expenditure is expected to increase by a comparably lower 13%, which will support a lower claims ratio of 89% in this financial year.
The results for the year to date (March 2010) reflect a significantly stronger underwriting performance relative to the corresponding budget, which is ahead of the year to date budget.
“We are extremely satisfied with our ranking and our ongoing performance,” says Anderson. “We look forward to continuing to offer high service levels and products that respond to needs in the marketplace to a growing membership base for many years to come.”
Visit www.profmed.co.za or call 0800 334 733.
(Profmed, August 2010)