FROM THE
CEO ’ S DESK
We are fast approaching the 2022 Festive Season and at PPS , we are starting to get a “ feel ” for where we are heading in terms of the year ’ s numbers . This will ultimately determine the profit distributions to our members with qualifying products .
We continue to see profits returning on the sickness and life insurance side as COVID-19 becomes a thing of the past . However , claims experience remains higher than in “ normal ” times . We still see many COVID-19 sickness claims coming through . We also see other ( non-COVID-19 ) claims at higher levels . The actuaries talk about “ long- COVID-19 ” – continued higher mortality and morbidity because of the pandemic . In short , we expect decent underwriting profit in 2022 but it will not yet be at pre-pandemic levels .
PPS has a big balance sheet ( more than R40 billion ). This is good for our members , as it means we can withstand big shocks and not be concerned about our ability to honour our contractual commitments to them . It also means investment returns on those assets generate a significant portion of the profit we distribute to members yearly . Last year was one of those exceptional investment years that only come once or twice a decade . Because the time horizon of our members is long ( the average PPS member is with us for at least a generation ), we can take a long-term approach in our investment philosophy .
A significant portion of the portfolio is invested in growth assets such as equity , which yields the best returns over the long term . But a great investment year such as 2021 is usually followed by a mediocre or even negative year or two . We do not expect much from the investment markets in 2022 . Returns might well be negative .
However , our approach has rewarded our members well over longer periods . The longer-term investment track record of PPS has been exceptional . The PPS brand has always been associated with market-leading insurance solutions . But I suspect the brand will also be associated with exceptional investment returns in the future .
On almost all fronts , PPS is making great progress in 2022 . Despite the exceptionally challenging environment around us , this year is again likely to be a record year in terms of new business inflows in most of our businesses . What a privilege to be part of this community of professionals ! It has always been in our DNA to step up to the next level when the going gets tough . We were , after all , founded during a war .
During the third quarter of this year , we launched a brand campaign : “ Finding the Forgotten Graduate ”. We were curious about our country ’ s first professionals . Who was the first professional of colour in South Africa ? Who was the first female in certain professions ? Who was the first accountant , engineer or actuary ?
History is a personal hobby and passion of mine . I can see this campaign getting legs and running for many months , perhaps even years . I trust our members will enjoy the many stories that we are curating .
The theme for this edition of The Professional is generosity . I share my thoughts ( and a beautiful story ) on this theme on page 8 .
I trust that you will find this edition as enjoyable , educational and value-adding as always .
Regards ,
PPS Group Executive
Izak Smit
7