CEO’S MESSAGE TO MEMBERS Overview It is my privilege to present the PPS Integrated Report for 2023, celebrating another year of successfully providing our members with customised financial services solutions and returning value to them in many different ways. The strength and resilience of our mutual model continue to prove itself, and as we face new challenges and opportunities, we are building on them to provide even more significant benefits for our members. Guided by the ethos of mutuality embraced by our founders more than 80 years ago, all premiums paid into our insurance businesses, after the expenses of managing those businesses, are ultimately returned to our members (with investment growth), either through claims, added value or (for members who hold a qualifying life-risk product), through allocations to their PPS Profit-Share Account™. The PPS Investments Family Network provides for the aggregation of individual and family assets, enabling members to enjoy lower fees as the result of a larger, combined asset base. In short, all decisions our Board and executives take are made entirely for the benefit of our members. I can assure you, we as management find much purpose in serving in such a model! In PPS Life Solutions, the most critical factor influencing operational profits is life, sickness and disability claims, which, since the COVID-19 pandemic has abated, have returned to average levels that are now only slightly above our long-term actuarial expectations. There is still a small pandemic-related impact, and given the tough economic backdrop, the propensity to claim on the sickness side has also increased. However, it is pleasing that operating profit has now recovered to more than a billion rand, the pre-COVID-19 level. From an investment perspective, markets across the globe remained volatile throughout the year, reacting to geopolitical events. In South Africa, we have our unique challenges and risks. Economic growth remains very low and political risks high. The unstable power supply exacerbates the situation, impacting investor and business confidence. This impacts the valuation of financial instruments (South African equities and bonds). However, after a flat investment performance in 2022, very much expected after a fantastic 2021, we saw much better returns in 2023. Financial markets were especially strong in the first and last quarters of 2023. Given our As we operationalise our current five-year strategy, our focus will be on expanding and enriching the benefits of mutuality for our members. At the same time, our focus will extend to growth in new market segments and territories. PPS has a unique value proposition to offer its members and our function as custodians of that proposition is to consistently secure and deepen its value. Izak Smit Group Chief Executive Officer “ “ 22 Leadership commentary
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