17 / 184
PPS INSURANCE
Since inception PPS has catered only to postgraduate
professionals, which is a niche market with a distinct risk
profile. Our 76 years unwavering focus on this group has
unlocked the deep insights that enable PPS to design and offer
superior products that remain cost competitive.
Another fundamental differentiator is that PPS is the only
major financial services provider that has retained the principle
of ‘mutuality’ at the core of our member value proposition.
In effect, 100% of the net profits are returned to members in
accordance with a ratio determined by their contributions.
Other financial services providers competing for graduate
professionals are invariably profit and shareholder-driven,
which prevents them from offering 100% profit sharing and
inevitably means there are different interests between the
shareholder and policyholder.Our rivals simply cannot compete
on overall returns.
What we do
The PPS sickness and disability cover – our flagship product
– offers more than the traditional income protector package of
most other insurers. PPS disability cover pays out if a member
falls ill for a period of time, without having to prove loss of
earnings. Unlike certain competitors, we do not deduct from
the payment should the member receive any remuneration
during the period of disability.
PPS also offers Life Cover, Lump Sum Disability, Accidental
Death and Education Cover products that are all intrinsically
superior, due to PPS’s built-in profit-share benefit.
Besides profit sharing, other main differentiators are:
• International cover without loading or exclusions
• No discounting on disability payments or limits to number
of claims
• Automatic cover for potentially hazardous pursuits such as
scuba diving, flying private airplanes and motorcycle racing.
We have factored in that many graduates enjoy stimulating
pursuits outside of their professional lives.
As PPS membership has always been based on educational
levels, we reviewed our entry criteria against education
systems and standards. Our updated criteria provides more
clarity and transparency.
Performance
Membership numbers, market share and broker support all
improved in the year of review. Gross premiums from long-term
insurance products grew by 12%, while PPS policy lapse rates
remain the lowest in the industry.
Prospects
PPS is introducing new technology to our member interfaces in
2018 to make engagement more seamless and intuitive for all
parties. These will include an automated membership eligibility
tool to speed up the process of adding new members and a
projection calculator to enable members to calculate future
values of their profit share, including variations from buying
more products or cancelling existing products.
In 2018, proposed legislation for the financial services industry
that has been in the pipeline for long is scheduled to start being
rolled out. This legislation will doubtless affect certain facets of
our business – distribution in particular - but PPS has prepared
thoroughly for potential impacts.
In the broader macro-economic context, South Africa’s
troubled political and economic environment adversely
affected consumer confidence levels which was detrimental
to new business volumes in the life insurance industry during
the year. Whilst PPS was not immune to this trend in 2017, we
performedwell in the second half of the year, and ended the year
more or less on par with 2016 in terms of new business inflow.
We did, however, see an increase in claims, which is not unusual
during economically challenging times. Fortunately, these have
remained well within actuarially determined limits.
15