PPS Integrated Report 2021 Trustees’ Report | 126 Trustees’ Report Holding entity The holding entity for the PPS Group is The Professional Provident Society Holdings Trust, registration number IT 312/2011 (‘PPS Holdings Trust’), which controls all the entities in the PPS Group. Covid-19 virus pandemic The outbreak of the COVID-19 virus pandemic continued to have a significant financial impact on the results of the Group in 2021. The financial impact is seen in the increase in gross long-term insurance claims (both sickness and death claims), as well as increased variability in investment returns as a result of the uncertainty in the financial markets. There was a positive impact on the short-term insurance claims as a result of reduced activity due to the lockdown continuing through part of 2021. The impact of the virus is expected to continue in 2022, although at a lower intensity compared to 2021. The Group is monitoring the impact on a continuous basis and management actions are taken where appropriate. Going concern and solvency PPS prepared scenarios of the potential impact of the pandemic on its operations. These scenarios included qualitative and quantitative analyses. The results of these scenarios indicate that the pandemic will not impact the going concern status of the Group, as assets are estimated to be sufficient to settle liabilities. Although the pandemic has continued to have a material negative impact on operating profits in 2021, the solvency of the Group remains resilient and is expected to meet regulatory requirements, even under extreme stressed conditions. Principal activities PPS Holdings Trust is a trust registered by the Master of the High Court in terms of the Trust Property Control Act of 1988. PPS Holdings Trust's sole investment is 100% of the shares of Professional Provident Society Insurance Company Limited (‘PPS Insurance’). The beneficiaries of PPS Holdings Trust are the PPS Group companies. Membership of PPS Holdings Trust is acquired through participation in PPS Group products. The Ordinary Members of PPS Holdings Trust control the PPS Group through the election of trustees. All the profits of the PPS Group are allocated to the Ordinary Members of PPS Holdings Trust through their participation in their policyholder PPS Profit-Share Accounts. PPS Insurance Company Limited (‘PPS Insurance’) is a wholly-owned subsidiary of PPS Holdings Trust and is a long-term insurance company registered in South Africa in terms of the Insurance Act, which offers a broad range of insurance products, including sickness and incapacity benefits, life and disability benefits, critical illness benefits and business assurance policies. PPS Insurance also issues linked living annuities and endowment policies to PPS members. Professional Provident Society Investments (Pty) Limited (‘PPS Investments’) and its subsidiaries are whollyowned subsidiaries of PPS Insurance which provide, inter alia, savings and investment products primarily to PPS members. During 2021 a strategic decision was taken to transition the responsibility for managing the PPS ProfitShare Account to the in-house multi-manager, PPS Multi-Manager, a wholly-owned subsidiary of PPS Investments. Professional Provident Society Insurance Company (Namibia) Limited (‘PPS Namibia’) is a wholly-owned subsidiary of PPS Insurance and provides insurance products exclusively to the Namibian market. A reinsurance agreement with PPS Insurance is in place for PPS Namibia. In terms of this reinsurance arrangement, PPS Namibia partially reinsures its obligations to the Namibian policyholders with PPS Insurance. This arrangement was put in place in order to protect the security and benefit expectations of the Namibian policyholders. Without this reinsurance arrangement, the Namibian subsidiary with over 5 000 Namibian policyholders would be exposed to higher volatility from fluctuations in claims experience. Professional Provident Society Healthcare Administrators (Pty) Limited (‘PPS Healthcare Administrators’) is a wholly-owned subsidiary of PPS Insurance, which administers Profmed and other medical schemes. PPS Healthcare Administrators’ objective is to provide professional service and to support the sustainability of the schemes by applying scheme, benefit and tariff rules properly and managing clinical risk, to enable medical schemes to provide for the health care needs of members when they need it most. The administered medical schemes have their own independent boards of trustees.
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