continued to be paid timeously, and we devoted much attention to improving efficiencies and total member experience. Members continue to benefit from the value of the products they hold and from additional contributions to their PPS Profit-Share Accounts. This is testament to our business model’s robust nature and stable and strong leadership, equally solid values and a performance-driven organisational culture. PPS remains unique in the South African financial services industry, differentiated by its ethos of mutuality. This gives the business a deep purpose – to secure the livelihoods and lives of our members – often even beyond the numbers. As a company with solid capital reserves and diversified business interests, we consistently react to changing circumstances by focusing on longer-term investment performance, business growth and member outcomes. To amplify the benefits of this model, in 2022, we delivered a ground-breaking marketing and communications campaign relevant to us as a business, our members and South Africans as a whole. Our “Finding the Forgotten Graduate” campaign reminds us of past graduates who broke barriers and recorded remarkable achievements regardless of the social, economic and political challenges they had to face. We find much inspiration in this, to excel despite the circumstances. Their stories emphasise the proud history of academic excellence in South Africa and the support that PPS has offered graduate professionals since the company was established 81 years ago. While it is naturally difficult to predict what 2023 will bring, I feel confident that PPS will continue to steer a steady course and successfully navigate a world that has changed so rapidly in recent years. Business performance This year’s results again demonstrate the effectiveness of mutuality in providing financial security and unrivalled longterm benefits for our members. Despite the cost-of-living pressures, we continue to be grateful to our members for their loyalty, which is confirmed by low membership attrition rates, low policy cancellations and low early Profit-Share withdrawals. There can be no doubt that our shared resilience is what keeps us going. Although it was a year in which we slowly exited the pandemic era, COVID-19 sickness claims remained high. We are grateful that COVID-19-related death claims reduced significantly – almost disappeared – enabling us to return to underwriting profitability on the life insurance side. New business, the lifeblood of an insurance provider, has had another successful year despite the challenging environment. Where most other life insurers in the industry reflected flat growth, PPS celebrated another record year of new business flows. Expenses also remained within the set parameters. We continued to see a sound operational performance in all our subsidiaries. PPS Investments, in particular, reached several key milestones in 2022. The business had set itself a five-year goal in 2017 to double in size, internally referred to as its 60/60 target. And indeed, the business increased assets under management (AUM) from R30 billion in 2017 to more than R60 billion in 2022. The number of investors increased from 30 000 to more than 61 000 over the last five years. The increase in AUM was supported by good fund performance relative to benchmarks and peers. Our investment managers hold diversified multi-manager investment portfolios, enabling them to effectively counteract high levels of risk and sudden reversals in market trends. There was a sizable migration of the portfolio from external fund managers to our internal team. Our investment strategies continue to provide a reliable financial safety net for our members and a great proposition available to our advisers when they advise their clients. Our healthcare administration business continued to grow, as did our short-term insurance business. We have especially seen significant growth in our health professions indemnity business, now at scale to start delivering profits. This business was started four years ago in response to the increasingly high indemnity insurance costs in an ever-more litigious environment. Many members are still unaware of all the solutions available to them – beyond life insurance and income protection. To encourage more cross-solutioning, two years ago, we rolled out the PPS Profit-Share Cross-Holdings Booster. This boosts members’ share of profits if they use more qualifying products across the business areas. The PPS Investments Family Network, launched in 2019, encourages the aggregation of individual and family assets, enabling members to enjoy lower fees because of a more extensive, combined asset base. These are examples of many innovations developed and launched over the past years. We believe in consistently innovating according to the evolving needs of graduate professionals. For example, our PRO-FiT digital member engagement platform is constantly being enriched. This enables members to control their PPS portfolios directly, engage with the larger professional community and explore ways to optimise their Profit-Share. 17 Leadership commentary
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