FROM THE
FROM THE
CEO’ S DESK
Dear reader,
We have recently wrapped up the communications and presentations around our financial results for 2024. It was indeed a very good year for PPS and hence for our members. The total profit that we were able to allocate to our members’ notional PPS Profit- Share Accounts™ was the best in our 84-year history. This performance was supported by several key factors. Strong investment markets in 2024 played a major role. Our core life insurance business also delivered underwriting profitability that is now much closer to our long-term actuarial expectations, following the volatility of the COVID-19 years. In addition, disciplined expense management helped strengthen results. Our other PPS subsidiaries – outside of life insurance – also performed exceptionally well. These businesses are now starting to make a meaningful contribution to the Group’ s overall performance. I trust that our members are pleased with our results.
An interesting question that a member asked during our annual general meeting was why PPS do not pay non-claims bonuses( this member stated that he has never claimed during his long tenure as a PPS member). Valid question. My answer was that our members who do not claim do indeed receive“ bonuses”( Profit-Share). And, because we do not have shareholders as stakeholders, these“ bonuses” are, generally speaking, higher than at other( listed) companies. Why? Because there is no“ extra mouth to feed”. Equity holders in listed companies( rightfully) need a return on their investments, so there is leakage out of the pool to them. At PPS, we do not have this leakage. Our underwriting profits go back to our members by way of allocations to their PPS Profit-Share Accounts™. But what is more, our members who have claimed also get their proportional share. Our philosophy at PPS is that if you are unlucky to have a claims event, then this should not impact your Profit-Share. What a beautiful model! A model that, once you understand it, you really fall in love with!
Personally, I will remember the 2024 results not only because of the good numbers but because my eldest son received his first PPS Profit-Share allocation. It was a small number, the princely sum of R160! But it is a start. I am sure it will grow to a notable amount in the years to come. Our biggest PPS Profit- Share Account™ amounts now to almost R6 million.
The theme for this( 15 th) edition of The Professional is remarkable experiences. On page 8, I share some thoughts on this theme, noting that tastes and interests, and hence“ remarkable”, will differ between people. Mine will be biased towards sports like running and cycling. On this front, I remember how our actuarial professor at university told us long ago that“ if you want to become a professional, you need discipline and grit; and one of the best ways to learn this is long-distance running”. He would then challenge us students to do a half-marathon race with him. And we did, believing that we invincible youngsters would show the old prof a thing or two. But at around the 18km mark, Caspar Greeff would effortlessly trot past us.
Fast forward to 2016 – I finally tackled that annual run between Maritzburg and Durban. A few months later, I ran into Caspar at a department anniversary event and proudly shared the news. That pride quickly turned to disbelief when I heard his time, as a late seventy-something, beat mine in my late forties! Caspar, you are the ultimate professional, not just as an actuary but in so many areas of life. We are honoured to highlight parts of your nearly seven-decade career on page 22.
Regards,
PPS Group Executive
Izak Smit
75