PPS Life Insurance About PPS Life Insurance PPS Life Insurance provides long-term life, accidental death, sickness, critical illness and disability insurance for graduate professionals, a niche with a distinct profile and unique needs. We aim to provide peace of mind, security, and wealth protection for our members, both during their working lives and throughout retirement. Our products and benefits, therefore, offer features and benefits that many competitor products do not. For example, our flagship product – the PPS Sickness and Permanent Incapacity Cover – offers much more than other similarly positioned products available on the market. The sickness benefit is designed to support the member during an initial period of sickness for up to 728 days. Uniquely, the member does not have to prove loss of earnings to receive the benefit. In addition, any remuneration received during a period of illness is not aggregated from any other earnings that the member has received, nor does it have a direct negative effect on their Profit-Share Accounts. This was a particularly valuable feature for members who were diagnosed with COVID-19 in 2020 and 2021, offering them the security of an income at a time when they were ill and unable to work. Not only that, but in the initial phase of the pandemic, members who had to self-isolate due to exposure to the virus were able to claim their sickness benefit even though they had not necessarily contracted the virus. This was a protocol that went further than what was available elsewhere in the market. As the pandemic developed through further waves and as national self-isolation periods decreased, our protocols were adjusted and eventually we could do away with this benefit. In cases where a member becomes chronically ill or is permanently incapacitated, the Permanent Incapacity benefit replaces or supplements their income through to retirement, while benefits from their Profit-Share Account and any retirement products they may hold continue to accrue. Other differentiators offered by the PPS Life Insurance product suite include international cover and cover for hazardous pursuits that some professionals engage in recreationally, such as scuba diving or flying private aircraft. Also, unlike other offerings on the market, the PPS ethos of mutuality ensures that PPS members who have qualifying life or risk insurance products automatically participate in the PPS Group’s Profit-Share programme. The PPS Profit-Share Cross-Holdings Booster allows members with life insurance to boost their ProfitShare participation by taking up other products offered by PPS subsidiaries or affiliates, such as PPS Short-Term Insurance, PPS Investments or Profmed medical aid. Performance As noted in the CEO report, it can be argued that the 2021 pandemic year provided the opportunity to PPS to continue to assist its members, not only through value returned through claims, but also through investment returns that were added to Profit-Share Accounts. On the claims side, we track COVID-19 and nonCOVID-19 claims. The experience of the claims classified as non-COVID-19 followed our normal actuarial expectations closely and was only 4% higher than in 2020, coming in at R2.87 billion for the year. However, as is the case with the sickness claims, we have reason to be believe that some of these claims were still COVID-19 related although not acknowledged as such. To this should be added the COVID-19 claims acknowledged as such and these amounted to R1.4 billion, resulting in total gross life insurance claims of R4.26 billion, an increase of 36% on 2020. In 2021, we paid 11 587 COVID-19 sickness claims to the value of R424 million. We also paid 193 COVID-19 death claims to the value of R975 million. We, therefore, paid almost 12 000 COVID-19-related claims in total during the year. The total number of claims during 2021 was 24 151 (23 651 sickness claims and 500 death claims). If we average it out (although in practice it followed the COVID-19 waves of course) it amounts to more than 100 claims per workday. In short, we assisted our members in their time of need to an unprecedented extent. These claims volumes of course impacted operating profit. Yet, the strength of our mutual model and the quality of our risk pool were such that operational solvency is not an issue, the Life business did not record any operating profit. Another reason why 2021 was extraordinary is that new life business inflows ended the year at a record level, with new annual premium income in South Africa and Namibia growing by 23% year-on-year. This achievement was despite the restrictions that the pandemic placed on financial intermediaries’ ability to operate freely. They had to adapt to a hybrid way of working. From a turning-a-challenge-intoan-opportunity perspective, though, remote contact for routine matters has improved efficiencies and has added a new level of ease in doing business between financial advisers and their clients. PPS Integrated Report 2021 PPS Group performance at a glance | 56
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