Remaining efficient while still investing in growth initiatives is a balancing act says Tiffany Boesch.
Professional Provident Society (PPS) has announced its 2019 financial results, stating that the company had outperformed most of the strategic goals it had set for itself in 2019.
The highlights of the results announced are:
- R3,7 billion paid in valid claims and benefit pay-outs to members.
- R4,2 billion allocated to PPS Profit-Share Accounts, proof our long-term focus on investing has delivered.
- 6 804 PPS members with more than R1 million in their Profit-Share Accounts.
- R5 billion in revenue allowing us to invest to the benefit of your profit-share accounts.
PPS group CFO Tiffany Boesch says:
“In an environment where many companies struggle to grow new business, PPS experienced new business growth of 10 percent on the risk side, with new annual premium income on the life insurance side reaching a quarter of a billion rand for the first time. This, and the incredibly low lapse rates, contributed to total earned risk premium income being up nine percent, reaching R5 billion for the year.”
Tiffany adds that 2019’s insurance claims were largely within actuarial expectations, and amounted to R2.3 billion, which is up 13 percent compared to the previous year. “To put this into context, PPS pays more than R9 million every workday to its members,” she said.
On the expense side, Tiffany says remaining efficient while still investing in growth initiatives, requires a careful balancing act, especially in a challenging environment. “After claim payments, expenses, and reserves that are set up for the future, the operating profit that PPS was able to allocate to its qualifying members’ profit share accounts, amounted to R1.1 billion, a pleasing performance in this environment.”
PPS said in a statement that its main subsidiaries also did exceptionally well against targets:
- Life insurance annual premium income – up 10 percent to a quarter of a billion rands.
- Healthcare administration grew principal members adding 8 percent to revenue
- PPS Investments delivered solid growth of 19 percent with assets under management up 21 percent to R37,8 billion.
- PPS Short-Term Insurance improved expected claims performance
- PPS Enablement and Advisory Services maintained growth
“It is somewhat surreal talking about 2019 numbers when the whole world has suddenly changed after the year-end, within two months, due to the Covid-19 pandemic. Nevertheless, our members benefited from strong operating profits as well as good investment returns in 2019,” says PPS CEO Izak Smit.
Izak adds that the investment firm’s members are not immune to the prevailing environment. “In fact, many of our members in the medical fields are on the front-line fighting the Covid-19 pandemic. But our experience is that professionals generally display responsible personal risk management, an unwillingness to unnecessarily terminate insurance cover, an urgency to return to their professions after falling sick, and the desire to continue in their professions well into an advanced age. These behaviours lead to lower lapses and claims and ultimately to more profits to share between members.”
Looking ahead, Smit says that the effects of Covid-19 and the impact on the markets and economy will be significant. But in conclusion, he said that PPS is well positioned for the new decade, and remains long-term focused.