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The Board’s policy is to maintain a strong capital base to protect policyholders’ and creditors’ interests
and satisfy regulators whilst still creating value for policyholders.
The level of accumulated funds required by the Group is determined by the Insurance Act 18 of 2017 in
South Africa and Namibian legislation (Act 5 of 1998) in Namibia, together with the Group’s licence
requirements.
The minimum capital requirements must be maintained at all times during the year. The table below
summarises the minimum accumulated funds requirements across the Group and the actual accumulated
funds held.
Group
2018
2017
R'000
South
Africa Namibia
South
Africa Namibia
Capital held
434 287
6 000
377 573
6 000
Regulatory capital
165 341
4 000
143 528
4 000
The Board considers the capital of the Group to be the total of all accumulated funds held as well as
the DPF Insurance Liabilities (refer note 13) as the policy holders are also the members of the Group.
A detailed Asset Liability Matching (ALM) investigation is conducted regularly to better understand
the potential impact on the capital of the Group of different market conditions, such as interest rate
fluctuations and volatility in equity prices. The impact of varying operational conditions (such as
variations in deaths, withdrawals and profits) on the Group’s capital is also presented to the Board.
The results of the ALM investigations may lead to changes in the approved asset class mixes contained
in the Investment Policy, in order to address any increases in the risk of volatility identified in the
ALM investigation.
There have been no material changes in the Group’s management of capital during the period. The Group
has maintained its level of regulator capital cover at 2.6 times. This decision has resulted in R56.7 million
(2017: R9.5 million) being allocated to accumulated funds.
Short-Term Insurance
The Board’s policy is to maintain an adequate capital base to protect policyholders’ and creditors’
interests and satisfy regulators whilst still creating value for shareholders.
The level of accumulated funds required by the Company is determined by the Short-Term Insurance
Act 18 of 2017.
The minimum capital requirements must be maintained at all times during the year.
The Group has a level of CAR cover at 1.43 times (2017: 1.93 times).
The Group has complied with all externally and internally imposed capital requirements throughout
the period.
PPS Collective Investment Scheme funds managed by PPS Multi-Managers Pty Ltd
The Group invests in various registered unit trusts in order to match obligations provided in
policyholder contracts.
Each fund has its own legal constitution and operates within a defined fund mandate delegated to
the appointed fund manager. Market and credit risks assumed within the assets held are controlled by
various protection mechanisms within the mandate and in law. For example, the Collective Investment
Schemes Control Act, No. 45 of 2002 as amended, in South Africa prescribes maximum limits for the
concentration of risk exposures.
The Collective Investment Scheme’s oversight board appoints administrators who are responsible to
ensure that the fund’s mandate and any internal and legislated control procedures are adhered to. In the
event of a breach they are obligated to immediately bring it to the attention of the fund’s trustees,
Board and management for remedial action.