Financial services provider Professional Provident Society (PPS) has allocated an all-time-high R5.33-billion in profit-share to members in South Africa with qualifying life-risk products’ notional PPS Profit-Share Accounts.

This marks the largest allocation in its 84-year history.

This was announced upon the release of PPS’s financial results for the year ending December 31, 2024.

The allocation marks a nearly R1-billion increase from R4.35-billion in 2023 and consists of an all-time-high operating profit allocation of R1.74-billion and an investment return allocation of R3.59-billion.

PPS provides tailored financial solutions exclusively for graduate professionals in South Africa, Namibia and Australia. It has no external shareholders.

“Last year’s performance demonstrates our commitment to mutuality and shared success. We support our members in building a strong financial foundation for today and retirement while also fostering individual financial resilience and contributing to broader economic growth,” PPS Group CEO Izak Smit said on April 15.

In 2024, in addition to the profit-share allocated, the PPS Group returned R5.95-billion in total benefits to its members in South Africa and Namibia, slightly down from R6.12-billion in 2023.

This included R1.96-billion in profit-share payouts to members who exited their life-risk cover phase, primarily owing to retirement. Permanent incapacity benefit payments increased by 14.7%, reaching R973.6-million and life cover benefits paid decreased by 16.5% to R1.15-billion.

Additionally, PPS paid R972.7-million in sickness claims, R536.2-million in critical illness benefits and R161.3-million in lump-sum disability benefits.

In South Africa, the group’s life insurance gross earned premium revenue totalled R6.44-billion, up 7.3% from last year. It also kept its lapse rate impressively low at just under 4.42% despite graduate professional members experiencing financial pressures from the constrained economy.

New life-risk yearly premium income reached R257.5-million, growing by 5% compared to R245.4-million in 2023. A significant contribution was made by independent financial advisers, who generated three-quarters of the PPS Group’s new business, while the remaining portion originates from its internal channels.

Members with PPS life-risk products in South Africa increased from 127 490 at the end of 2023 to 129 366 at the end of 2024, while those with a products across the PPS Group increased from 155 554 at the end of 2023 to 159 252 at the end of 2024.

PPS BUSINESS UNITS

PPS reported that its PPS Investments business delivered strong growth in a year of global political uncertainty with elections being held in countries worldwide. Its total assets under management remained resilient ending at R96.52-billion in 2024, up 14.9% compared with R84-billion in 2023.

Gross inflows were R9.67-billion. This is testament to the business’s robustness and diligence embedded in its investment processes.

PPS’s short-term insurance business, which includes personal and business insurance product lines, exceeded expectations. Despite a competitive industry, PPS Short-Term Insurance’s gross written premiums were R421.5-million, up 23% from last year.

The business recorded a profit before tax amounting to R31.3-million in 2024. This comprises PPS Short-Term Insurance’s Personal and Commercial Lines business’s first-ever profit of R6.8-million and PPS Health Professions Indemnity profit of R24.5-million. Now in its sixth year, the health professions indemnity business recorded gross written premiums of R146.1-million.

PPS Healthcare Administrators had a successful year as well. Trends revealed increases in elective procedure claims (a post-pandemic effect) and rising claims for non-communicable diseases and mental health treatment, particularly among younger individuals. Home-based care claims also grew, reflecting efforts to reduce hospital stays.

PPS Insurance Namibia also showed strong performance. Operating profit for PPS Insurance Namibia increased to N$62.3-million from N$49.3-million in 2023. The total net of reinsurance claims increased from N$83.3-million to N$98.4-million.

Gross insurance premium revenue increased year-on-year by 9.7% from N$233.3-million to N$255.8-million. Members in Namibia also benefitted from good investment market returns in 2024.

Investment returns distributed to members’ notional PPS Profit-Share Accounts have increased from N$176.9-million in 2023 to N$201.6-million in 2024. Members with PPS Insurance Namibia life-risk products increased from 5 444 at the end of 2023 to 5 718 at the end of 2024.

PPS Mutual, an affiliate company established in Australia nine years ago, continued to perform well. It now has more than 13 000 graduate professional members and has attained a highly favourable yearly in-force premiums of more than A$90-million.

PPS Mutual also earned the title of Best Retail Life Insurer from Australian ratings firm Adviser Ratings, for the second year in a row, securing a place in the top two in all categories.

LOOKING AHEAD

“Our strategy is to extend mutuality to previously untapped market segments and territories. PPS Mutual, our associate company in Australia, continues to perform . . . well and we are preparing to enter the New Zealand market in the second half of 2025 subject to regulatory approval,” Smit said.

Locally, in January, PPS launched glu Mutual, an entirely new division designed to extend mutuality-driven benefits to a broader audience across South Africa, notably individuals between the ages of 25 and 55, ideally with a degree, diploma or a connection to an existing PPS member. Qualifying members of glu will share in the business’s yearly returns.

“As we look ahead, we are excited about the opportunities to further enhance the protection and wealth creation our members enjoy through mutuality. Our unique model ensures that success is shared – allowing members to not only safeguard their financial well-being but also to benefit from the long-term value generated,” Smit said.