GROUP PERFORMANCE Gross written premiums of R229.8 million UP 14% on 2022 Lower than industryexpected lapse rate 12.2% 9 249 Insured professionals PPS Health Professions Indemnity PPS Health Professions Indemnity, a short-term insurance solution, is designed for healthcare professionals registered with the Health Professions Council of South Africa and working in clinical practice. The solution was developed in response to member discomfort with steep escalations in indemnity insurance costs in the market due to an increasingly litigious environment. Its aim is to provide the security that health professionals need to be able to focus on their clinical practices, safe in the knowledge that a brand they trust is taking care of their indemnity needs. Its underwriting philosophy also sets PPS Health Professionals Indemnity apart. Notably, it uses a riskadjusted model, assessing the risk profile for each practice individually to determine the cost of its indemnity insurance. Each case is assessed by taking into account clinical history, caseload and geography as the business does not simply rely on standard rates based on either location or speciality. In addition, premiums are adjusted according to the risk profile of the individual member. If a practitioner manages their risk well and has a lower probability of claiming, they can choose to use a voluntary claims deductible feature to lower their premiums. PPS Health Professions Indemnity is therefore proud that its book grew from 10 413 insured professionals in 2022 to 12 609 in 2023. In 2023, PPS Health Professionals Indemnity was able to extend the solution to PPS members in Namibia, who can now benefit from both the cover provided by the solution and the high level of personal service on offer. There has been impressive uptake of the solution since it was launched and, in the reporting period, there was an increase of 21% in the number of insured professionals. This led to an increase of R112.7 million in gross written premiums in 2023, up 26% compared to 2022. The growth in new business together with low lapses have seen the active policy book grow exponentially since inception. Performance During this reporting period, as before, PPS Short-Term Insurance witnessed a surge in weather-related claims, some of which were climate-related. These included claims resulting from the KwaZulu-Natal tornado in June, the Western Cape floods during September and the heavy hailstorm in Gauteng during November. In addition to these, there was also an earthquake that struck Johannesburg in June. We handled the claims promptly and effectively in keeping with our commitment to the overall well-being of our members. Ongoing loadshedding continues to impact our members and claims for equipment affected by power outages remain high. Loadshedding also has an impact on economic growth which, in turn, places financial strain on our members. Despite these and other macroeconomic issues, PPS ShortTerm Insurance performed ahead of projections, recording a loss of R10.78 million against the business plan of R16.5 million, a favourable variance of 74%. We are, therefore, pleased, that after five years of operation, we are very near to reaching the break-even point for this business. The gross written premium also rose by 14% to R229.8 million compared to the previous year, even though new business volumes were under pressure throughout the period. As a result, the business is only 1.8% behind the plan for net written premiums, largely because we exceeded budgeted average premiums on new business. We are also proud that we showed a lapse rate of 12.2% which is well below the 15% short-term insurers traditionally plan for. 40 Group performance
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