Bankmed’s national scale financial strength rating reflects the scheme’s very strong solvency and strong liquidity, albeit restrained by high sectoral concentration and intermediate earnings. Bankmed’s capitalisation remained a key rating strength, consistently trending within a very strong range, with a statutory solvency of 40% at FY19 (FY18: 39%), well balancing affordability and reserve utilisation. Going forward, the scheme’s capitalisation is expected to be maintained within a very strong range, given its demonstrated ability to manage solvency within the internal targeted band of 35% to 40%.
The Stable Outlook reflects expectations that Bankmed’s solvency and liquidity will be maintained within strong to very strong levels, while the membership profile will remain unchanged over the outlook horizon. Upward rating movement is considered unlikely over the medium term, given the scheme’s admissibility criteria that limit scope for enhanced sectoral and membership diversification. However, sustainable improvements and stability in earnings could be positively viewed.