The South African Competition Court has unconditionally approved the merger of Bonitas Medical Fund (Bonitas) and Nedgroup Medical Aid Scheme (NMAS), which will take effect from January 2022.
The product offerings of each program will remain unchanged for the rest of the year, however, NMAS members will be officially migrated to Bonitas from January of next year.
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“The merger will ensure that the members of NMAS will be part of a broad, sustainable medical program and further strengthen Bonitas’ role as a leader in the healthcare market,” said Lee Callaoppen, CEO of Bonitas.
“Over the past few years, various developments in the healthcare industry have led to a series of consolidations and mergers between plans, a trend that is expected to continue. As a key player in the industry, with a wide range of options tailored to the needs of South Africans, Bonitas is positioning itself as the ideal merger partner.
The merger comes after NMAS boards commissioned preliminary inquiries into a possible consolidation opportunity via an independent actuary earlier this year.
The positive results of the first feasibility studies provided adequate motivation, which then prompted the NMAS Board of Directors to pursue a merger process.
“NMAS has over 47,000 beneficiaries and the membership is encouraging. The advantages of fusion are numerous [and] Bonitas is South Africa’s second largest open medical aid with financial metrics above legal requirements and the industry average, ”said Callaoppen.
“The program has one of the highest credit ratings in the industry, which stands for high claims settlement capacity and stability, in turn ensuring members’ access to healthcare. quality.
As part of regulatory requirements, the merger process was submitted for consultation with members, who then voted in favor at the plan’s annual general meeting held on August 18.
Depending on the plans, the meeting was followed by ratification by the Competition Commission as well as approval by the Medical Plans Council (CMS) to ensure that due diligence was given to all regulatory processes.
“The newly merged program will have a larger national footprint and better economies of scale to negotiate favorable rates and improve supplier networks. Bonitas’ strong financial stability and predictable loss history should also translate into greater value for new members of the program, ”added Callaoppen.
“The boards of directors of NMAS and Bonitas have entered into these merger negotiations with the best interests of our members at heart. We believe that this merger will be to their advantage and to their advantage. ”
Bonitas is an open medical plan while the NMAS operates as a closed medical plan with members limited to employees and retirees of Nedbank and Old Mutual Insure.
Palesa Mofokeng is a Moneyweb intern.