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thrive in the commercial realities now taking shape.

I commented last year that PPS is now one of the few

South African financial services providers presenting

an end-to-end portfolio of solutions, and indeed the

only one that focuses exclusively on the needs of

professionals. If you are a professional looking for

one ‘home’ to take care of your end-to-end financial

services needs, PPS is that home.



In the strategy section of this report we outline why

and how PPS is developing the professional space

for our members. For 2018, PPS continued rolling out

strategy in terms of seven focus areas:

• Our exclusive member value proposition

• Digitalisation of our services for members

• Expand our value proposition to advisers, both inside

and outside of the organisation

• Develop holistic solutions for our members, and

cross-market these products and services

• Create alternative revenue streams to boost value

and profit share for our members

• Position the PPS brand as the undeniable financial

services provider of choice for professionals

• Develop the PPS community culture (where

community includes our whole ecosystem, our staff

and our members)

In-depth strategic planning revealed that the future for

professionals is digital and mobile, especially as newer

generations become dominant. Younger professionals

expect efficient online transacting as a matter of course,

while older members and advisers will appreciate the

added reach and convenience that PPS tools bring to

established practices.

In brief, PPS is creating an appealing and productive

PPS online community featuring multiple means of

communication with and between our members,

PPS representatives and advisers. This omnichannel

environment will enable more efficient claims and

other processes, while also encouraging members to

network and collaborate for mutual benefit.

An important part of our future strategy remains

to partner with professional associations across the

various professional disciplines. These partnerships

allow us to understand the needs of professionals

better, and to develop bespoke solutions for particular

professional needs. We value these partnerships with

the various associations deeply.

At the same time, we are creating value through

revenue streams adjacent to our traditional offerings,

to accelerate member profit share and mitigate against

equity market and foreign exchange volatility.



PPS Insurance

Our main life insurance business again recorded a

healthy profit for our members in 2018, and even

managed to grow this profit from 2017. This profit was

supported by claims experience that remained within

budgeted assumptions, and good expense control.

Our first and foremost purpose is to be there for our

members in times of need, to protect them. But it is

always pleasing when we are able to set aside a profit

share for our members, after we have honoured valid

claims. If we did not operate under the mutual ethos,

this profit distribution would have been to shareholders

but at PPS our members enjoy these benefits.

The one big disappointment of 2018 was the investment

markets. Our medium-term investment objective

remains to outperform inflation for our members by a

handsome margin. The way to achieve this objective is

to invest in a well-diversified and sensibly constructed,

balanced portfolio. Such a portfolio will contain a

significant portion of growth assets such as equities and

property. As most of our members are aware, growth

assets had a torrid time in 2018. Our asset managers

and investment strategy succeeded in protecting our

members from the worst that the markets had to

offer, but unfortunately the investment returns on our

members’ Profit Share Accounts were slightly negative

by the end of the year.

The impact will of course differ between members.

Members who have only recently joined us, or are

approaching retirement and have de-risked their PPS

Profit-Share Account through the Portfolio Choice

option, will not feel as much of the impact of the

investment markets in their profit-share allocations.

Members who have been with us for many years and

who have built up sizeable Profit-Share Accounts, will

of course be more impacted – most of the additions to

such accounts are typically from investment returns on

previous years’ profit. It is especially the powerful effect

of compounding over time that yields the sizeable

profit share that so many of our members eventually