Profits soar at PPS Namibia, N$72.1 million allocated to members’ profit share accounts*
PPS Insurance Namibia (PPS Namibia), the provider of intelligent financial solutions exclusively for graduate professionals, saw operating profit soar by 47% to N$67.4 million due to strong business inflows and an 86% drop in the value of COVID-19-related claims in the 2022 financial year.
In 2022, benefits and valid claims returned to PPS Namibia members amounted to N$165.3 million. Despite market volatility, PPS Namibia could also allocate an investment profit of N$4.7 million to members’ notional PPS Profit-Share Accounts*.
“The business had a very satisfying 2022 as we continued to bolster the well-being of our members. We are proud to have recorded the highest operating profit in the history of PPS Namibia and to allocate almost 34% of all premiums received in 2022 to our members’ PPS Profit-Share Accounts,” said Johan van der Westhuizen, Chief Executive of PPS Namibia.
“What differentiated 2022 from 2021 was a 9% decrease in net claims at N$73.6 million (2021: N$81 million. Gross insurance claims paid were down 34% on the prior year and amounted to just over N$100 million. We saw an unprecedented reduction in COVID-19-related claims in 2022 to 294 totalling N$7 million. There were zero COVID-19-related death claims. Against the backdrop of 2021, where we recorded 705 claims and payments of N$50.1 million and four COVID-19-related death claims,” said van der Westhuizen.
PPS Namibia is the largest financial services company of its kind in Namibia that focuses exclusively on graduate professionals, creating products and designing services catering specifically for their needs. The strength of PPS’s unique mutual model, among only two in Africa, ensures that all premiums paid by members who hold qualifying products are ultimately returned to them through claims paid or investment growth allocations to their PPS Profit-Share Accounts after business running costs. Globally, almost a third of insurance premiums go to mutual organisations.
“Through our long-term investment strategy, we remained fully grounded during unsettling times due to global events and extremely volatile financial markets. What was especially encouraging was the increase in new younger members. This reflects that young people realised how important it is to look after themselves financially and to protect their dreams, ” he continued.
New members continuously taking up PPS membership and introducing new products and services are essential to the health and growth of the business. Better-than-expected persistency rates by members were also recorded. The strained economic environment, however, impacted new annual premium income in 2022, which declined by 11% to N$17.7 million compared to 2021.
“Providing additional products and services to our members makes sense as our focus is on long-term benefits and protection. In September 2022, we introduced fiduciary services to our members, offering Wills drafting, the safe custody of Wills, estate and trust administration and estate planning services to help them leave behind a meaningful legacy. Members and intermediaries welcomed this,” stated van der Westhuizen.
Izak Smit, Group Chief Executive of PPS Insurance in South Africa, added: “The committed and professional way in which PPS Namibia supported members during the pandemic undoubtedly contributed to new member growth through word-of-mouth referrals. As a group, our focus remains steadfast on our unique exclusive member value proposition and innovating solutions, diversifying revenue streams, advancing our digitalisation efforts, and addressing the sustainability agenda as part of PPS’s purpose. Leadership and culture remain the cornerstone in delivering and ensuring strong relationships with our trusted financial advisers.”
* Members holding qualifying products share in the profit or loss of PPS through the notional PPS Profit-Share AccountTM and past performance is not necessarily indicative of future performance. PPS Insurance Namibia is a registered long-term insurance provider regulated by NAMFISA.