2019 Integrated Report

Another key indicator for the business is the lapse rate – a measure of the percentage of members who cancel their policies during the course of the year. The lapse rate for 2019 was below industry norm, which attests to the business’s differentiated service offering. The number of active policies now exceeds 15 000. RISKS, CHALLENGES AND OPPORTUNITIES Like all financial services business in South Africa, PPS Short-Term Insurance is exposed to ongoing political and socio-economic uncertainty and has to take this into account in all aspects of its business. Also, rapid technological developments had a disruptive effect on the financial services sector in 2019, representing both a challenge and an opportunity. As the COVID-19 pandemic unfolds, an immediate risk is the economic impact onmembers’ ability topay their insurance premiums. In these unprecedented times, we are investigating ways to support our members. Further risks to PPS Short-Term Insurance include the risk of the market becoming saturated with similar products, the risk of members dropping short-term insurance from their portfolios due to financial pressure and, finally, the risk of not being able to attract new members from the pool of recent graduates. Strategies are in place at both Group and subsidiary level to address these issues, including continuous focus on marketing to new graduates. PPS HEALTH PROFESSIONS INDEMNITY An innovation specific to PPS Short-Term Insurance is PPS Health Professions Indemnity, a new product launched in early 2019. Designed specifically for health professionals registered with the Health Professions Council of South Africa and working in practice, it provides superior coverage and, above all, peace of mind. PPS Health Professions Indemnity was a response to steep hikes in the cost of indemnity insurance and an increasingly litigious environment. The product provides the security health professionals need to be able to focus on their practice, safe in the knowledge that their indemnity needs are in the hands of a brand they know and trust. In addition, in line with the ethos of mutuality, when profits arise they are distributed to the Profit-Share Accounts of members with qualifying products. PROSPECTS While the business is still relatively new and faces significant environmental challenges, its performance in 2019 indicates that both its short- and medium- term prospects are positive. GROUP PERFORMANCE AT A GLANCE | 45