Overview As in 2020, the ongoing COVID-19 pandemic and the economic uncertainty this created were significant challenges we had to face during the year, both as a country and as a business. These were exacerbated by the impact of the civil unrest that occurred in Gauteng and KwaZulu-Natal in July 2021. Together these events slowed the local economy’s recovery and made many of us feel unsure about the future. Unemployment climbed to a new record high of 34.9% and consumer spending declined markedly. Of particular concern is the youth (age 15-24 years) unemployment rate that reached a record high of 66.5%. And, while the unemployment rate for graduates in this category is much lower than for the cohort as a whole, graduate unemployment is still a notable feature of the South African socioeconomic landscape. PPS fell victim to a malicious cyberattack in March 2021 but no member data was compromised. Our IT team has since restored all systems and we remain vigilant to protect our systems from similar attacks. Within this context, PPS’s mutuality model continued to provide a high level of stability in a very unpredictable environment, with all PPS Group subsidiaries performing well. With its strong balance sheet and the highly profitable model – very much due to the focus on the professional segment which has behavioural traits that support low lapses and a long-term focus – we were able to support our members to a level that would have made our founders of over 80 years ago proud. It was a year during which the focus was on claims support. All valid claims, many of them COVID-19-related, were settled. This is testament to strong leadership, equally strong values and a performance-driven culture. Since profits are in any event returned to members with qualifying products, we were able to apply protocols that were different to those of the market. I shall elaborate more on this below. Yet, despite the tremendous claims support, we did manage to end the year with a small operating profit. It was also a year of very good investment returns. Investment markets look forward and often make their big moves when the night seems darkest. This allowed us to make significant additions to our members’ Profit-Share Accounts. However, investment markets, and particularly growth assets, can at times make negative corrections and I must remind members that expectations for future returns should be tempered – they can even be negative at times. 39 | Chairman’s statement PPS Integrated Report 2021
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