Provident Society for Professionals has grown into Namibia’s largest mutual insurer
The Professional Provident Society (PPS) Namibia is a lucrative insurance business. On a gross premium income of N$145 million in 2017, it has paid out only N$88 million in direct claims. A further N$169 million was allocated in profits to its members for the year, although it is not clear how these profits are derived.
PPS members receive a monthly statement from their insurer indicating the steady growth in their investment accounts but this money is only paid out upon the compulsory retirement age of 65. If this account is liquidated before 65, the indicated amount reduces significantly. PPS members are insured for death, sickness, dread disease, disability and loss of income. The insurance model is based on the mutual i.e. pooled risk-sharing concept, but is only available to graduate professionals with a 4-year tertiary qualification or higher. This reduces its operational and investment risks considerably as a very large portion of its client base is self-employed.
“PPS Namibia members benefit significantly from the company’s unique value proposition as they share in all company profits via allocations to their PPS Profit-Share Account. Upon retirement, they qualify for a lump sum pay-out of all the accumulated profits. PPS Insurance is the largest mutual financial services company in Namibia,” stated PPS Namibia this week when announcing its sterling results.
“Success is better shared,” said Chief Executive Adri Vermeulen. “The 2017 profit-share allocations to our members were the highest in five years. In fact, cumulative profit-share allocations to members for the last five years total N$601.1 million. Once again, our mutual model has shown how value is optimised when success is shared,” he said. In 2017, PPS Namibia’s total assets reached N$1.3 billion.
Izak Smit, PPS Group Chief Executive said the South African operation also delivered strong growth in 2017 attributing this to its members growing appetite for the mutuality model. PPS insurance is also a favourite of insurance brokers since it is an easy sell provided the prospective client falls in the professionally qualified category.
“We are delighted with the performance of PPS Namibia during 2017. Not only did we pay benefits to members in their time of need, but we were also able to provide generous profit allocations. As our business continues to grow, the overall value members receive will also rise as they share in our success through the allocation of profits to their PPS Profit-Share Account. These results demonstrate the strength and sustainability of a mutual financial services company,” concluded Vermeulen.