37. 37.2 • • % of Net % of Net Earned Earned Premium Premium 2023 2022 59% 60% 35% 35% 5% 5% <1% <1% 100% 100% Group Motor Property Liability Other The Group commenced selling investment products from 2007 through its subsidiary PPS Investments (Proprietary) Limited (‘PPS Investments’). For these contracts the investment risk is carried by the policyholders. In PPS Investments there is a risk of reduced income from fees where these are based on the underlying value of the invested assets. There is furthermore a reputational risk if actual investment performance is not in line with contract holders’ expectations. These risks are managed through a rigorous multi-manager investment research process applied by PPS Investments’ investment managers, which includes both technical and fundamental analysis. The investment contracts underwritten by PPS Insurance are the PPS Endowment, the PPS Corporate Endowment and the PPS Living Annuity. Risk management relating to investment contracts The PPS Short-term Insurance board approves the reinsurance renewal process on an annual basis. The reinsurance programme is placed with external reinsurers that are registered with the Prudential Authority, or enjoy equivalent jurisdiction status under the Prudential Authority, and have a domestic credit rating /rating equivalent to a domestic credit rating, of no less than A-. Risk exposure and concentrations of risk The following table shows the Group’s exposure to short-term insurance risk (based on the carrying value of the insurance liabilities at the reporting date) per category of business: A Whole Account Clash & Catastrophe Excess of loss treaty with five layers. PPS Short-term Insurance ('PPS STI') retains the first R5 million of each and every claim, excluding reinstatement premiums as a result of a claim against the cover; A 10%/90% Quota Share Arrangement in respect of the Health Professions Indemnity liability product. PPS STI retains 10% of all premiums and claims. The Head of Actuarial Function reviews and attests annually on the adequacy of reinsurance risk transfer. The latest report concluded that the reinsurance arrangements adequately cover the insurance risks faced by PPS Short-Term Insurance. The core components of the reinsurance programme comprise: Management of risks (continued) Insurance product risk management (continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 31 December 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) 211 Notes to the Consolidated Financial Statements
RkJQdWJsaXNoZXIy MTY2ODY3Ng==