Bonitas paid out over R15 billion in claims

Bonitas, South Africa’s second-largest open medical scheme, paid out R15.8 billion in claims in 2022 and increased its member reserves by more than R1 billion.

Bonitas Medical Fund announced its 2022 financial results on Tuesday. The fund achieved a net surplus due to positive membership growth, increased reserves, a higher solvency ratio, and strong investment performance. 

The company reported a record high of R8.8 billion in member reserves – up from R7.4 billion in 2021. Its solvency ratio improved from 36.5% to 41.3%, and it experienced a net membership growth of 4%.

“We have exceeded industry benchmarks, achieving a R1.78 return for each R1.00 spent on administration and managed care – 12% higher than the industry average of R1.59,” CFO Luke Woodhouse said.

To address affordability challenges, Bonitas restricted the average increase in membership contributions for 2023 to 4.8% compared to a Consumer Price Index (CPI) of 7.2% as of December 2022. 

“We introduced our first contribution increase freeze, with increases only applied from 1 April 2023, to create some financial respite for our members,” said Woodhouse.

The fund achieved a 7.2% return on investment, with an investment portfolio value of R9.97 billion – a significant increase from the R8.32 billion reported in 2021. 

Bonitas paid claims paid to the value of R15.8 billion in 2022, with hospital costs remaining a significant portion of claims. 99.47% of hospital claims were paid within ten days, the fund reported.

Looking ahead to 2023, Bonitas expects further market volatility and increased disease burden. 

“Our agile approach to the execution of our strategy is likely to stand us in good stead in 2023, as we expect further volatility in local and international markets and an increase in disease burden such as mental health,” said Woodhouse.

Bonitas 2022 performance highlights

The list below provides an overview of Bonitas’ financial performance last year.

• R1.7 billion gross healthcare result (2021: R1.8 billion)
• Reserves reaching R8.8 billion (2021: R7.4 billion)
• A net surplus of R699 million (2021: R1.4 billion)
• R49 million spent on FWA programme with Medscheme – banked recoveries in excess of R55 million
• Solvency ratio of 41.3% (2021:36.5%)
• Strategic purchasing strategies yielded savings of at least R441 million
• Claims paid to the value of R15.8 billion
• 99.47% of hospital claims paid within 10 days
• Projected negotiated hospital savings of R260 million (2021: R198 million)
• A 7.2% return on investment for members’ funds
• An investment income of R781 million (2021: R1.2 billion)
• R9.97 billion total investment portfolio value excluding cash (2021 R8.32 billion)
• Net claims incurred R17 billion (2021: R 15.8 billion)
• Healthcare cost savings initiatives realised savings of R487 million(2020: R221 million)
• 90.9% claims loss ratio (2021: 89.8%)

The annual financial statements were prepared following International Financial Reporting Standards (IFRS).