Global Credit Rating Co. (“GCR”) can trace its origins back to 1996 when it was established as the African division of the New York Stock Exchange-listed, Duff & Phelps Credit Rating Co.

It has become established market practice for medical schemes to be rated by Global Credit Rating Co. (“GCR”), which now rates roughly 30 medical schemes in South Africa. In our opinion the main reason for the rapid acceptance of ratings in the medical scheme sector is the growing appreciation of the fact that, by commissioning an independent rating, the scheme provides its members with a valuable service.

Considering the fact that all schemes act as “custodians” of public funds, as well as other factors such as the evolution of increasing consumer awareness and the trend towards improved public disclosure, schemes are increasingly realising the benefits of communicating their financial standing via the independent ratings process.

The 2 major benefits of participating in the process are summarised as follows:
 
1.            A formal rating provides members, employer bodies and brokers with an independent “comfort level” as to the financial strength of the medical scheme. Accordingly a favourable rating can be utilised as a powerful marketing tool.
 
2.            Furthermore quite apart from the rating, the process provides members of the management committee with the benefit of a knowledgeable, independent, third-party opinion on the organisation and its operations (including an independent evaluation of the strengths and weaknesses within the internal control environment, risk management processes and corporate governance procedures).