2020 INTEGRATED REPORT

OVERVIEW As we are all aware, the most significant event of 2020 was the COVID-19 pandemic and the impact of subsequent lockdowns around the world, which has led to a global recession. In South Africa, this was exacerbated by two sovereign credit rating downgrades; the first by Moody’s Investors Service in March and the second by Standard and Poor’s in April. The knock-on effect of these events and the related decline in both domestic and direct foreign investment was immediate and severe. By year end, the country’s official unemployment rate was 28.45% and the gross domestic product had dropped by 7.5%. Despite this, PPS managed to stand firm and even to record growth in some areas of the business, which is testament to our mutual model, strong leadership and equally strong values and performance-driven culture. Certain areas of thebusiness, such as PPS Investments, recorded exceptional growth. This was partly due to good strategy around new business flows, our investment managers holding diversified investment portfolios in line with our long-term investment time horizon, but also due to a reduction in costs resulting from the local lockdown. Consequently, we have been able to provide a reliable financial safety net for our members in their time of great need, guarantee job security for our staff, support our financial advisers and, just as importantly, steer a steady course through very stormy waters. PPS remains unique in the South African financial services industry, differentiated by its ethos of mutuality. This was to prove its value time and time again over the past year. As a mutual company with solid capital reserves, we were not under pressure to cut costs or preserve capital in the same way that large listed companies were. This meant that we were able to act swiftly to put various relief measures into place for our members, pay claims reliably, secure our financial-adviser network, and maintain our full staff complement throughout the lockdown. We were also able to deliver a comprehensive information campaign offering both general and specific information to help members, financial advisers and staff deal with the impact of the pandemic. OUR RESPONSE TO COVID-19 PPS is always responsive to changing member needs and nothing could have brought this into sharper focus than the COVID-19 pandemic, which impacted our members significantly. Our response to this crisis was therefore immediate and extended beyond the parameters of our existing offerings. In the first instance, we developed claims protocols specific to the pandemic. In addition to providing benefits to members who became ill, we provided benefits to asymptomatic members who had to quarantine following potential exposure to the virus even though this was beyond the scope of our sickness product. These benefits applied to both local members and those living outside South Africa. Between March and December 2020, we paid 4 201 COVID-19 sickness and benefit claims to the value of R389.8 million. As expected, medical professionals were most affected by the pandemic and accounted for 74% of these claims. In 2020 PPS managed to stand firm and even to record growth in some areas of the business, which is testament to our mutual model, strong leadership and equally strong values and performance-driven culture. CHAIRMAN’S STATEMENT | 37