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PPS, the specialist financial services provider to the graduate professional market celebrates its 75th Anniversary by revealing strong growth in member numbers and significant new business initiatives, which include the transformation of the current PPS Short-Term Insurance brokerage into a fully registered short term insurance company and the launch of PPS Mutual in Australia in the next few weeks.
Speaking in Centurion at the launch of PPS’ new Five Green Star rated office block, PPS Centurion Square, CEO Mike Jackson says that these milestones once again serve to highlight the benefits to the company and its members of operating under an ethos of mutuality.
“Despite the economic challenges in 2015, PPS still had an excellent year with respect to growth in membership. More than 7,500 new members joined PPS in 2015 – up by 35% on the previous year– and the growth among student members from across a broad spectrum of campuses is particularly pleasing. While we will only announce our final 2015 results on 26 April, we have certainly experienced significant new business growth this past year.”
He explains that unlike listed financial services companies, who have to maximize profits for shareholders, PPS operates under the ethos of mutuality, which means that the company exists solely for the benefit of its members, and allocates the totality of its operating profits and investment returns to its members on an annual basis by way of allocations to their PPS ProfitShare Accounts. “The fact that PPS doesn’t have external shareholders means it is able to
concentrate on its long-term commitments. Unlike a listed company, PPS also has no need to set aggressive short-term profit targets, which often leads to highly volatile returns to shareholders.”
Since the inception of PPS in 1941, the company has focused exclusively on servicing graduate professionals in South Africa, says Jackson. “Professionals continue to be in high demand in the country as a vibrant professional sector is critical for economic growth. As the company enters its 75th year, PPS will continue to serve its members by providing world class financial services covering their unique needs from graduation to retirement.”
A major development for the company this year is that PPS Short-Term Insurance, which has been operating successfully as a brokerage for the past seven years, has been transformed into a registered short-term insurance company. The company will in this new capacity continue to focus solely on the short-term insurance needs of the South African graduate professional market.
According to Nazeer Hoosen, Chief Executive Officer: PPS Short-Term Insurance Company, following the successful growth of the business, paired with a better understanding of the specific risks of the graduate professional market, the business has entered the next phase of its strategic roadmap. “By becoming a short-term insurer, we are now able to design and underwrite tailormade new products that provide innovative solutions which address the evolving needs of our members, in both their private and professional capacities.”
PPS Short-Term Insurance Company has entered into a joint venture with Santam, which has
assisted PPS to develop the systems required for operation as a short-term insurer and will provide
claims administration services. “Santam has taken up a minority shareholding in PPS Short-Term
Insurance Company,” says Hoosen.
In addition to this, PPS will replicate its current life assurance business model by launching PPS Mutual in Australia in the near future. Jackson says the decision to expand into Australia followed extensive market research. “The study clearly showed a gap in the Australian market with regards to a specialised mutual dedicated to servicing the insurance needs of the growing graduate professional market in the region.”
PPS Mutual will operate under an ethos of mutuality. The board will comprise of 50% representation from South Africa, ensuring that PPS’s success and knowledge is shared with the Australian management team.
Globally, the mutual and cooperative business model has been the fastest-growing part of the global insurance market, increasing from a global market share of 23.5% in 2007 to 27.1% in 2014,according to statistics from the International Cooperative and Mutual Insurance Federation (ICMIF).In Africa alone, there are now about 40 mutual/cooperative insurance companies which serve about eight million policyholders.
Shaun Tarbuck, CEO of the ICMIF, says; “Having worked closely with PPS over the last few years I can honestly say they are an excellent organisation with exemplary leadership. Within the mutual sector globally, they are certainly one of the thought leaders at ICMIF. Their continued focus on putting the member at the centre of all their strategic decisions is evidence of their commitment to the communities they serve.”