The South African private healthcare sector is world-renowned for its effectiveness and professionalism.
This, however, does not come cheap.
South Africans have felt the cost of medical aid in their pockets for years, and private healthcare costs are only increasing. Medical aids can’t always afford to cover everything – this is where gap cover comes in.
Choosing the right gap cover provider
Gap cover has become a saving grace for many South Africans, so choosing a gap cover provider has become as crucial as selecting a medical aid.
When looking for a gap cover provider that meets your individual needs and budget, it is best to contact a reputable broker to help with this.
However, if you have found a gap cover provider on your own, we recommend considering the following aspects:
FSCA Compliance
Firstly, ensure that a potential short-term insurance company is registered with the Financial Sector Conduct Authority (FSCA).
Credit ratings
A global credit rating is imperative as a gauging reference for a good gap cover providers credibility. All South African gap cover providers are underwritten by a medical aid that receives a credit rating score on a yearly basis.
Make sure that a secure medical scheme backs your gap cover provider.
Members reviews
You can assess the quality of a gap cover providers’ service by reviewing their policyholders’ reviews. You can read over 200 reviews from Total Risk Administrators policyholders on HelloPeter.
What to look for in a gap cover provider
A good provider will make sure to offer a range of benefits to cover their client’s needs.
They should offer a variety of products that can suit your family’s budget and individual needs. For example, TRA offers four products with a myriad of different benefits that will reduce your risk of going into financial debt from in-hospital expenses.
One of the most important factors to consider is who the gap cover provider is underwritten by.
Where does Global Credit Rating come in?
A global credit rating (GCR) for medical schemes indicates the ability of an organisation to pay claims quickly and in full. Rating agencies issue a corporate rating and help investors determine the risk associated with investing in a corporate bond.
A good product range is one thing, but having sufficient funds to cover claims is another. This is of high importance when considering the credibility of a gap cover provider.
A gap cover provider with a secure underwriter can help you feel at ease knowing that the medical scheme’s solvency is well managed.
In essence, when looking for gap cover, GCR is a crucial tool for measuring a provider’s financial stability.
What impact does a GCR have on the credibility of my gap cover provider?
The credibility of a gap cover provider hinges on their GCR, as their paying ability is directly correlated to this.
It’s no secret that a South African insurance company was recently placed in provisional curatorship. This means that the company’s solvency is at risk, and it is currently not financially sound.
The credibility of this insurance company is now in question, and its underwriters are currently looking to be underwritten by insurers with higher solvency ratios.
This is why short-term insurance providers must be underwritten by financially sound insurance companies. For example, TRA Gap Cover and Discovery Health’s Flexicare product are underwritten by Auto&General, an insurance company with a highly respected credit rating.
South African medical insurers with high global credit ratings are also likely to be ranked as the best health insurance providers in the country.
The effects of a sudden drop in GCR
A company that receives a low credit rating score is often barred from taking on new customers and is likely to expect a plunge in its share price.
South African medical aids with a low GCR will have to pay a higher interest rate to issue bonds or borrow money from a bank. This makes it harder for the company to improve their solvency ratio and find investors to provide much-needed capital.
The bottom line is that a sudden drop in GCR creates a significant risk for the insurance company and their underwriters.
Conclusion
When choosing a gap cover provider, it is essential to do thorough research and review the most up-to-date statistics in order to make an informed decision.
Having a gap cover provider with a high global credit rating will give you peace of mind in knowing that you are securely covered during your time of need. If you are concerned about the financial health of your gap cover provider, know that TRA strives to provide exceptional service and is able to pay claims quickly.
If you are concerned about your current gap cover provider or are trying to find the right gap cover for you, speak to a broker to alleviate your concerns and help secure the future of your health insurance.
