2020 INTEGRATED REPORT

PROFESSIONAL PROVIDENT SOCIETY SHORT-TERM INSURANCE COMPANY LIMITED (CONTINUED) ABOUT PPS SHORT-TERM INSURANCE PPS Short-Term Insurance is unlike any other short-term insurance provider in the South African industry. It provides intelligent short-term insurance solutions only to graduate professionals, a benign risk pool. These solutions include car, home, business and professional indemnity cover. In addition, it operates under the ethos of mutuality, which means that all profits are returned to members with qualifying products. The fair treatment of the whole pool of policyholders is therefore the most important goal of our business, and not protecting the interests of shareholders. Our consultants are always on hand to provide an efficient and professional service. PERFORMANCE The PPS Short-Term Insurance business had a successful year, performing better than expected on an overall basis. The COVID-19 pandemic did, however, have a significant impact on our financial results, which is evident from the lower-than-expected number of new policies written and a contraction of the in-force book. We also experienced a net increase in lapsed policies, largely as a result of the financial strain that our members experienced during this time. To help ease this pressure, we offered a 20% rebate on motor vehicle insurance premiums for the month of April. Throughout the year, we assisted many of our members on an individual basis by reviewing their cover whenever the need arose. The business did, however, benefit significantly from lower claims as members who were in self-quarantine or working from home used their vehicles less frequently than usual. This resulted in a loss ratio of only 51%, which is a decline of 18% from the previous year. PPS Short-Term Insurance now also offers Profit- Share allocations to members with qualifying life products. And with the introduction of the PPS Profit-Share Cross-Holdings Booster, members who hold PPS Short-Term Insurance policies can earn additional Profit-Share if they also hold qualifying life products. In addition, we enhanced our value proposition with the launch of a range of concierge services. These include Fine Protect, which takes the hassle out of paying traffic fines; Licence Protect, which provides an easy way of renewing South African vehicle licensing discs; Protect Me, which is a mobile panic button that members can activate anywhere if they feel threatened; and ID Protect, which sends a notification to them if there are any changes to their credit reports. We also launched a mobile app, which gives members the ability to view and amend policy information, submit claims and access the concierge services. Uptake of the app has been good and members have welcomed the new concierge benefit. Our objective remains to meet the specific short-term insurance needs of our professional members and the entire business is organised in order to do this. RISKS, CHALLENGES AND OPPORTUNITIES Like all financial services providers in South Africa, PPS Short-Term Insurance is exposed to ongoing political and socio-economic uncertainty and we have to take this into account in all aspects of our business. A further risk, which has come about as a GROUP PERFORMANCE AT A GLANCE | 63