GCR upgrades GEMS’s credit score and accords a positive outlook

The Government Employees Medical Aid Scheme (GEMS), the country’s largest restricted medical scheme, has once again proven its improving financial sustainability by receiving a strengthened financial rating from GCR Ratings (GCR) moving up from AA-(ZA) to A+ (ZA) and recording a positive outlook.

Financial prudence is a key priority for the Scheme, and proves that members can trust that their funds are in capable hands. The rating records the Scheme’s financial strength, taking into the account its sustained improvement in earnings and capitalization which is derived from a large membership base and sound liquidity reserves.

Statutory compliance was achieved for the first time since inception, and this was done through the Scheme registering strong net healthcare results and net surpluses, which accelerated reserves accumulation.

While also noting stimulated liquidity levels, the positive outlook captures the potential for the financial profile to remain resilient, albeit GCR believes that there is still the need to stabilise developing earnings strengths over the medium term.

Dr Stan Moloabi, GEMS Principal Officer says “The improved rating affirms the efforts and dedication of the Scheme’s financial team, under the stewardship of our Chief Financial Officer, Mrs. Karyna Pierce. We are extremely proud of this achievement.”

GEMS’ membership profile is underpinned by a large membership base and a favourable age profile. Moreover, GEMS benefits from a fairly stable defined membership pool, offsetting the risk of high concentration in the public sector.

Going forward, the membership profile is expected to remain positive to the rating, noting that material changes in membership profile over the medium term are unlikely, given accrued economic challenges counterbalancing management efforts to grow membership base.

“Our stable membership base is what has helped us to achieve such results, and it once again proves the strength of our mutually beneficial partnership with each and every member of our Scheme” he adds

According to GCR, the Positive Outlook reflects the strengthening in the Scheme’s financial profile, which, if sustained, could support upward rating movement.

GCR expects capitalisation and liquidity to be maintained above prudent levels given accumulated buffers, tolerating potential earnings moderation due to the impact of COVID-19 pandemic risks on gross premiums contributions and investment income among other factors. This continued stability will solidify GEMS’s place as one of the most trusted medical aid schemes in South Africa.

No public service employee should miss out on the brilliance of GEMS.

SMS “Join” to 33165 or call 086 004 367 or simply visit the GEMS website on www.gems.gov.za

All articles written by a STAFF WRITER have been checked and verified to the best of our abilities. Should you have any queries or concerns, please don't hesitate to email them to info@after12mag.co.za

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