By Ayanda Seboni, Group Executive Mutuality Professional Provident Society
In financial services, the Professional Provident Society of South Africa (PPS) stands apart by embracing the ethos of mutuality. This unique approach shapes every facet of our organisation, driving our commitment to shared success and collective well-being.
At the heart of the mutual model is the principle of putting members first, unlike traditional businesses, PPS does not face the inherent conflict between the needs of shareholders and clients because we do not have shareholders; our members share in our profits. As the only diversified financial services company in South Africa exclusively serving graduate professionals, we view mutuality as a powerful mechanism for nurturing community and solidarity among our members.
Membership in a mutual promotes accountability and transparency, as board members are elected by members to ensure decisions are made in their best interests. This structure also facilitates wealth growth, as members share in the business profits, leading to substantial long-term benefits. In recent years, PPS has produced over 10,000 “Profit-Share Millionaires,” members who have received more than R1 million in allocations to their notional PPS Profit-Share Accounts™. Additionally, tens of thousands more members have significant balances in these accounts, enhancing their retirement savings.
A frequently asked question is why PPS exclusively serves graduate professionals. This tradition dates to our origin during World War II when our founders established PPS to help medical professionals protect their income. Over time, this definition has expanded to include all graduate professionals—those with at least a four-year degree from a public institution or select private tertiary institutions. PPS proudly supports graduate professionals, who are the backbone of South Africa’s economy.
From a risk management perspective, PPS believes graduate professionals form a good risk pool, given the professional ethics and risk management intrinsic to many professions. This benign risk pool, combined with the sense of ownership that comes with membership, results in PPS having lower-than-industry lapse rates.
Mutuality benefits all stakeholders within the ecosystem. Intermediaries, for instance, benefit from accessing the PPS academy for training programs designed to enhance their skills as well as technical assistance from our Specialist Support Services (S3) these interventions empower them to perform better. In 2023, PPS paid R6.12 billion in gross benefits, covering our members in various ways, from sickness benefits to short-term insurance claims. PPS processed 15,931 claims, averaging 64 claims per day, with an average of R16 million paid out per working day. Specifically, PPS paid R849.1 million in permanent incapacity claims.
It’s greater than
a qualification.
It’s number-crunching that creates accountability, sustains businesses, safeguards jobs and keeps our collective bottom line above board.
In 2023, PPS paid R530 million in claims to the financial sector. Read about mutuality for the greater good in the 2023 Financial Results Highlights.
PPS is a licensed life insurer, controlling company and authorised FSP.
PPS’s recent annual results highlight its robust performance as a financial services partner:
- Total claims paid: R3.84 billion (down 4% from 2022)
- Sickness benefits: R949.5 million (down 5%)
- Critical illness claims: R556.4 million (up 34%)
- Mental and behavioural diseases: R224 million (across sickness, permanent incapacity, and disability benefits)
- Death claims: R1.394 billion (up 44%)
All this while adding R4,54 bn to the Profit-Share accounts of members securing their financial resilience while giving them leading industry-leading protection. The benefits of Mutuality expand beyond the members to their families too. The Family Network is a solution pioneered by PPS Investments ensures that families that save together can benefit from reduced fees. These returns together with Investment returns on previous Profit-Share can lead to some members getting more in their Profit-Share allocations than risk premiums paid. Mutuality is by far the most elegant way of maximising value for members, perhaps this is why the mutual model is so prevalent among financial services firms in Western Europe and North America.
Our organisational culture is deeply ingrained in our ethos, and it is rapidly emerging as our “secret sauce.” Many employees join or return to PPS because of this culture, a sentiment consistently highlighted as a key strength in our engagement surveys.
One of the most remarkable contributions made by PPS and its members is in advancing education in South Africa. We employ various interventions, including providing bursaries for deserving “missing middle” children and employees and supporting initiatives to upskill teachers.
This long-term, sustainability-aligned way of thinking sets mutuals apart. It is no wonder PPS is considered young in the mutual community at “only” 83 years old. Good business can be done well and that is the mutual way but at PPS, we believe that success is better shared.