The country’s medical aid industry reported a net deficit for the third quarter of 2022, yet remained well capitalised as it held a high percentage of free assets as at 30 September 2022. Additionally, the industry’s reserves level exceeded the minimum prudential reserves level requirement of 25% and is thus deemed to be financially sound.
This was indicated by the Namibia Financial Institutions Supervisory Authority (Namfisa) in its third quarter report released last week.
The report indicated the industry held total assets of N$1.8 billion as at 30 September 2022, a decrease of 4.5% from the previous quarter and down by 11.9% on an annual basis.
“The decrease in total assets was attributed to the decline in the capital value of investment assets held by the industry because of unfavourable market performances during the quarter under review,” reads the report.
Namfisa said the industry’s current liabilities increased by 0.2% quarter-on-quarter and increased by 12.9% year-on-year to N$497 million. The industry’s investments of N$1.7 billion at 30 September 2022 is considered adequate to withstand any adverse claims experience which may result from increased liabilities.
Furthermore, total contributions remained unchanged at N$1.2 billion for the quarter ended 30 September 2022 and grew by 6% on an annual basis. While membership grew by 0.8% during the quarter, the contributions did not grow similarly as some members opted to migrate to cheaper options, it said.
“Average contribution income per beneficiary was N$5 896 for the quarter ended 30 September 2022, a slight decrease of 0.8% quarter-on-quarter and an increase of 4.6% year-on-year. The average claims per beneficiary decreased by 1.5% quarter-on-quarter and increased by 5.3% year-on-year, to N$5 870”.
Microlending
Meanwhile, the Namfisa report also showed the microlending sector’s performance in the quarter under review was mainly driven by the number of household borrowers and the value of disbursements, which declined on a quarterly basis and increased marginally on an annual basis. In contrast, Namfisa noted credit extended to households by the banking sector increased on both quarterly and yearly basis during the review period.
In this regard, the microlending stock rose by 1.1% quarter-on-quarter and by 2.8% on a yearly basis, standing at N$63.2 billion over the review period. This upward trending trajectory was mainly driven by two categories of loans, namely other loans and advances as well as mortgage loans.
With respect to total arrears, a downward trend was observed and as a result, arrears decreased to N$1.5 billion at the end of the third quarter of 2022. The total value of arrears as a percentage of the total loan book stood at 21% at the end of the review period, while the payment in the current period stood at 79%.