Professional Provident Society (PPS), which provides financial solutions to more than 150 000 graduate professionals, reported a resilient performance through a tumultuous 2020, a year where claims rose through the pandemic.
PPS focused on delivering its core purpose of paying valid claims, after the number of claims picked up significantly due to the pandemic, and protecting its members’ financial health, said group chief executive Izak Smit in an interview by phone.
“We entered 2020 with solid capital reserves and with good momentum.
This meant that we could act swiftly to put relief measures in place, pay claims reliably, secure our adviser network and maintain our full staff complement throughout the lockdown,” he said yesterday.
The higher number of claims was indicated by the fact that medical professionals made up about 25 percent of PPS’s members, but comprised 74 percent of the claims last year, because they were on the front-line of the pandemic, he said.
The unique situation presented by the pandemic also served as a catalyst to accelerate the expansion and implementation of the digitalisation strategy, he said.
PPS is unique in the South African financial services industry, differentiated by its ethos of mutuality.
“Mutuality permeates every aspect of our business, from the way we are structured to how new innovations are designed,” said Smit.
He said the group performance was significant against the backdrop of spending nine months of their 2020 financial year operating under lockdown.
The group paid R4.84 billion in benefit pay-outs and valid claims to members in 2020, a figure 29 percent higher than in 2019.
Life claim payouts increased 45 percent to R3.12bn, of which 4 200 were Covid-19-related claims to the value of R389.8m.
Smit said PPS had been able to provide a financial safety net for its members. Because there were no outside shareholder interests to protect – opportunities were sought to assist members adjusting claim and premium protocols specific to the pandemic, while ensuring fairness between different cohorts of members.
Due to a strong balance sheet and profitability of the risk pool and the businesses, PPS was able to allocate R2.2bn in profit to members with qualifying products, he said.
The life insurance gross-earned premiums increased 7 percent to R5.12bn.
“While many members’ finances were strained, and they remained cautious about spending, their awareness of the need to protect themselves and their families against unforeseen shocks increased. This, and assistance with premiums where members were struggling, helped to keep lapses low,” said Smit.
He said it was impossible to make firm predictions for 2021, as the pandemic continues to evolve, and the long-term impact thereof was not yet known, although they were preparing for a third wave that was possibly milder than the first two waves.
“We are bracing for further waves, but an aspect that works in our favour is that many professionals in the frontline in fighting the pandemic, particularly those in the health professions, were the first to be vaccinated.”
Article credit https://www.iol.co.za/business-report/companies/pps-resilient-through-tumultuous-2020-9c3385e1-7e0c-4d92-b0d9-b2fe3d103848