Bonitas Medical Fund, South Africa’s second-largest medical scheme, maintained its A+ credit rating for the second year in a row in the financial period to June 2011, confirming the healthy financial position of the scheme.
The latest rating by Global Credit Rating (GCR) agency follows hot on the heels of the release in May of Bonitas’ financial results, which showed a positive R500-million growth in net income. During the same period the scheme also generated a healthcare surplus of R83m with an operating surplus after investment income of R278m, and has R2,5-billion in cash reserves.
Bonitas’ solvency ratio of 36,5% is well above the statutory 25% and much higher than the industry norm. The scheme is also expected to generate a healthy surplus and maintain a stable solvency ratio in the current financial year.
GCR says in its report that the placing of Bonitas under curatorship in May 2011 also contributed to the high rating, as this is a positive move towards strengthening the governance of the scheme going forward. The responsibility for the governance of Bonitas vests in the curator, Joseph Maluleke, who was appointed in May by the High Court to take over control of the scheme for a 90-day period.
GCR says Bonitas’ favourable market position as the second-largest open medical scheme in terms of principal membership was another positive consideration. Despite the relatively small decrease in principal members in the 2010 financial year, the scheme has recorded a compound annual growth rate of 4% in principal membership over the review period.
“Bonitas continues to exhibit very large reserves, with statutory solvency remaining at comfortable levels relative to regulatory requirements. Bonitas displays a sizeable investment portfolio, which has generated significant investment returns throughout the review period. Further, the improvement in key liquidity measures for the 2010 financial year was noted,” the GCR report also notes.
Mr Maluleke says: “The rating should be welcomed by all members and stakeholders as it dispels any doubts about the future of the scheme. Brokers should therefore act with restraint when advising clients.
“Throughout the period under review, we have served our members and protected their interests with great success. We will continue to ensure that members receive true value for their money.”
(Press release, August 2011)