PPS, the financial services company focused exclusively on graduate professionals, has declared that its total profit-share allocation to members for the 2016 financial year was over ZAR2.7 billion.
This makes the total cumulative profit-share allocation to members ZAR22.5 billion over the last ten years.
Izak Smit, PPS Chief Executive Officer, says that 2016 was a very volatile year, not only for the country but the world.
“Locally we experienced fluctuations in the value of the rand, while globally we saw the United Kingdom vote to leave the European Union and witnessed a dramatic and unexpected result in the US elections. However, despite these unexpected events and a tough economic environment, PPS stood strong in times of uncertainty and reaped rewards for its members.”
He adds that, in addition to the PPS Profit-Share Account allocation of ZAR2.7 billion, a further ZAR2.4 billion was paid to members in benefits, mostly life insurance claims for 2016.
PPS members enjoy a unique value proposition, as members share in all the PPS Group’s profits. These profits build up over their working lives and at retirement they can have these accumulated funds transferred to PPS Investments for further investment growth.
“In 2016, more than 4 000 of our members were made millionaires, solely from the profits allocated to their PPS Profit-Share Accounts.”
Smit notes that the company experienced significant growth in 2016, and new membership grew by 9% – with 61% of these new members under the age of 30.
In addition, the group’s total assets increased to ZAR31.4 billion, excluding assets under management, the highest ever for the company.
The group’s investment arm, PPS Investments increased the assets under its management by 16% to ZAR25 billion in 2016, which illustrates the increasing appetite of South Africa’s graduate professionals for the unique service offering and approach of PPS.
Unlike most financial services providers in South Africa, PPS is not listed on the stock exchange and has no external shareholders – instead, PPS operates under the ethos of mutuality and all PPS’ profits are allocated to PPS members on an annual basis by way of allocations to their PPS Profit-Share Accounts**.
An increased interest in the mutuality model is taking place globally, with the total market share of mutual and cooperatives insurers increasing from 24.1% in 2007 to 26.7% in 2015, according to the latest statistics from the International Cooperative and Mutual Insurance Federation (ICMIF).
Shaun Tarbuck, ICMIF Chief Executive Officer says that mutual and cooperative insurers performed robustly in the past few years as they continued to expand their global reach, shown by a growth in the aggregate number of policyholders served and people employed around the world. “Mutuals and cooperatives continue to show their relevance at a regional level, with a growing influence in the African market.”
“We are extremely pleased with the performance of PPS during 2016, especially in light of the challenging economic conditions. These results demonstrate the benefits of belonging to a financial services group that operates under the ethos of mutuality. As the PPS business continues to grow, our members* benefit continually by having financial peace of mind and by being allocated all of the profits of the company,” concludes Smit.