Ben Telfer: 

Hello everyone, and welcome to today’s ICMIF webinar, the third episode in our Mutual Advantage series. Today, we will hear from the case study from PPS in South Africa, and their webinar is titled: “Making membership more meaningful through mutuality.”  

I’m pleased to introduced today’s speakers. Firstly we have Shelley Jones, who is head of research and development: member value proposition; and we also have Dawn Ngwenya-Dibakwane, who is head of communications from PPS. Shelley, Dawn, thank you for joining us today, and Shelley, I will hand over to you. 

Shelley Jones: 

Thanks, Ben. Thank you for joining us today. Dawn and I are going to be sharing a little bit about how PPS makes membership more meaningful through mutuality. In this webinar, we’re going to touch on a few aspects. We’re going to look at how our Profit-Share acts as a vehicle for creating and protecting the wealth of graduate professionals beyond their workings years. We’re also going to touch on how our product design and our claims-centricity remains a key differentiator that continues to attract members to PPS. We’ll then have a look at how we use PRO-FiT, which is our member engagement platform, to connect with our professionals, and how we then use it to give them targeted rewards and value-adds. And lastly we’re going to touch on how we plan to harness the power of the professionals and the broader PPS community going forward. 

I’m not too sure how many of you are familiar with PPS, I’m going to start with a little bit of an introduction into PPS. Unlike most financial services providers in South Africa, PPS is not listed on the stock exchange, and we have no external stakeholders. So instead, we operate under the ethos of mutuality, and all the profits go to our PPS members who have qualifying products. And we do this on an annual basis, by way of allocations to what we call their profit-share accounts. 

Taking a step back, we came into existence on the 8th of July 1941. A group of eight dentists started the business when they were looking for a way of securing a better system of protection in case they had sickness or injury that prevented them from practicing their profession. Since then, we’ve matured into a fully-fledged financial services group, and we’re the only financial services company in South Africa that focuses exclusively on graduate professionals. 

In South Africa, the graduate professional market is not very large, it’s about 1% of the population. But we offer tailor-made insurance, investment, healthcare, advice, and fiduciary solutions to graduates who hold a qualifying four year degree, or the equivalent of that. We focus on the professional market because it makes sense for us as a business as much as it does for our members. The professional risk pool is quite different to the general population, because their approach to risk is far more prudent, and I think most of us would agree that in the world of insurance, a prudent risk profile is obviously going to be very attractive. 

At the moment, we have just over 150,000 members who have products with one or more of the PPS group businesses, and we are not just based in South Africa. We actually have a presence beyond South Africa, with a business in Namibia, which is just north of South Africa, also on the African continent, and then we have a business, PPS Mutual, which is in Australia. And that sort of ties into one of the future strategies that we’re wanting to develop, is we’re wanting to develop a boundaryless global strategy so that we can provide products and services that talk specifically to the global professional, who in fact moves across geography as they pursue their career ambitions. 

I’m going to touch next on the Profit-Share and how we use that as a vehicle to create and protect wealth for our members. What the slide is telling us is that we take the operating profits and investment returns, we invest those on behalf of our members. And the resulting returns accumulate into the members’ individual Profit-Share accounts. What comes into the business is effectively the premium from the members, and obviously we need to use that for three core things. First, we need to pay claim costs, obviously that’s why we’re here. We need to cover some of the expenses relating to the running of the business, and then we need to guarantee future claims by keeping some reserves available for those future claims that might come our way. But the rest of the profit goes back to the members in the two sections that we charted out earlier, the operating profits and investment returns. 

The figures that you’re seeing in this slide are in fact allocations made in the 2019 year, and obviously you can see that focus of 3.7 billion settled to claims, which reflects our commitment to settling claims. That’s the reason why we exist for our members. And then the other part is to return those profits back to members in the allocated accounts. 

On our Profit-Share, there’s different types, at retirement, or at the time of death of our members. And this happens regardless of whether the members have received any claim benefits from the underlying products during the year that they were a member. When they are nearing retirement, we present then with a few options. At age 55, we allow them to move their profit share into a more conservative portfolio, so that they can protect the wealth that has been accumulated over the years. When the member retires at age 60, the profits that have accumulated become available to them. Now, we always try and encourage our members to keep these assets invested so that they can generate further returns and they can supplement their retirement incomes. But members are, effect, able to utilize these funds as they want to going forward. 

 What we do want to do, though, is we want to provide some innovative post-retirement funding solutions that will incentivize them to use a profit-share to fund these costs. So this could be anything like offering a discount on their post-retirement medical aid contributions, or a discount on insurance premiums if they fund it from a profit-share account. So if we have a look at this in our mind, the benefits of mutuality are self-evident. There is no leakage of profits to shareholders, and the members with qualifying products receive all of the group’s profits. 

A little bit about how each person gets their share. So the allocation made to each member is determined by the range of products held by that member and the relative size of these products. So the greater the number of qualifying products that the member has, and the more that the member contributes to the premium pool, the greater the allocation to the member’s profit-share account. And this remains a key differentiator in our value proposition. Over the years, we’ve obviously expanded the range of qualifying products, because we’ve broadened the financial products and services that have become available through the group, and the most important thing is that our competitors don’t offer profit-share. So this is a powerful incentive for our members to bring more and more of their financial products into the PPS stable. 

Ben, if I can ask you to just play the first video for us. It’s just a highlight of some of the Profit-Share highlights for our 2019 financial year. 

VIDEO

4.3 billion rands in profits for the year 2019. How much of this record amount do you think PPS shared with its members? How about all of it? That’s because at PPS, we believe success is better shared. You see, at PPS, not only do we say there’s more for you, we believe in doing business based on the principle of mutuality, something few financial services companies do. Speak to an accredited PPS financial advisor about mutuality to find out ow much more there is for you. PPS is an authorized FSP. Profit-share on qualifying products only. Ts and Cs apply. 

Shelley Jones: 

So that clip was just an example of one of the ways that we market this proposition to our members. You’d understand that enlightening our members about the value of profit-share and the power of profit-share is one of our key marketing strategies. But we also are true to our word, and we do generate and accumulate wealth on behalf of our members. And the slide that you’re looking at at the moment really talks to that. So in the last 10 years, 27.5 billion rand has been allocated to members. And if you actually look at the detail, many of our longstanding members have in fact received far more in profit-share than what they’ve paid in premium over the lifetime of their policy. So some members actually get to a state where their annual Profit-Share allocations actually exceed the premium contributions that they make each year, so in effect they’re starting to get their insurance covered for free, at a point in time. 

This slide really is the highlight of the number of profit-share millionaires that we’ve created in PPS, and at the end of 2019, that number grew to 6804 professionals who now have more than a million rand in their profit-share accounts that they will be able to get access to on retirement or on death. So we think that’s a pretty powerful proposition, but we do have plans to enhance our proposition even further. This is with an initiative that we call profit-share cross-holdings booster. Because we are a financial services organization that now offers more than just the life insurance product that we started with, the profit-share cross-holding booster effectively will allow us to recognize loyal members. So the loyal members who have products with the PPS subsidiaries, in addition to the qualifying life insurance products, will qualify for an additional profit-share allocation for each additional group product that they have. 

If you look at the slide and the person has the provider policy, which is a entry product into the profit-share account, they will get the normal allocation that they would earn for that product into their profit-share account each year, but wouldn’t get any booster allocation. But if they had one additional subsidiary or affiliate product, they would get an extra percentage allocation to boost their profit share allocation, and that profit-share booster increases with each product that he has. So if he has two, he gets a higher percentage allocation towards his profit-share account, and likewise if he has three, he gets an even higher percentage allocated to his profit-share. So this will allow us to reward loyal members who hold more than one qualifying product across the group. 

Something that’s important that our members understand, so we have developed a tool that we call the Profit-Share Play Zone that helps our members create scenarios so that they can demonstrate how they would be able to grow their profit-share account over time. And Dawn’s going to share a little bit more on this later on in the presentation, when she chats about PRO-FiT, which is our member engagement platform. But before we get there, I’m going to hand over to Dawn so that she could share a little bit more information about why our products continue to attract members to PPS. 

Dawn Ngwenya-Dibakwane: 

Thank you, Shelley, and hi everyone. So while Profit-Share is a unique proposition that attracts members to us, we also focus on providing products and services that meet the unique needs of the professional markets. Being part of PPS, which operates under the ethos of mutuality, means that our members have access to products that are designed specifically for their needs and that are not readily available elsewhere in the market. 

This slide shows the PPS products that are currently earning allocations to the profit-share accounts of members. We’ll briefly touch on these products in subsequent slides, but first we want to talk about our top achiever. So Shelley, you can move to the next slide. And this is PPS’s flagship product, the Sickness and Permanent Incapacity Benefit, which is designed to ensure that our professional members can live the lives that they planned to live when they first qualified in their chosen professions. 

The product offers much more than the traditional sickness or income protection products that are available from other insurers, and many of our members are in private practice, such as healthcare, legal, engineering, and if they become ill, they’re not able to perform their usual professional duties to generate their income and maintain their lifestyles. So this particular product is designed to alleviate this hardship. 

And there are a few key things about this product that I just want to share. So a sickness benefit is designed to support the member during an initial period of sickness for a duration of up to 728 days for a particular condition. Unrelated sickness conditions could see members claiming for sickness days in excess of that 728 days over the lifetime of their policy. 

Also, in addition to the sickness benefit, members can claim for total or partial sickness. If they are able to return to work on a partial basis, they can receive supplementary benefits from PPS’s sickness benefit. And a unique identifier of our particular product is that our members don’t have to prove loss of earnings in order to receive the benefit and remuneration that’s received during the claim period. And any remuneration that they are getting at the time that they are claiming is not deducted from the amount that would pay out to them. 

Should the member become permanently incapacitated, then the permanent incapacity benefit kicks in, and it replaces or supplements the member’s income until the time of their retirement. What’s significant about how our benefit works is that we look at the specific duties that you were performing, your qualifications and the profession that you’re working in when determining what we will award for incapacity. 

If, for example, you were a surgeon, and can no longer perform surgeries following an injury to your hands, we’d provide you with 100% award, even if you subsequently decide to run, say, a medical supply business and you’re able to generate income from that. So really is a good offering. And some other differentiators of our product include international cover or exclusions. We also have automatic cover for potentially hazardous pursuits, like scuba diving, flying private airplanes. We’ve made allowance for this because we know that many members enjoy energetic pursuits outside of their professions.

We believe that a benefit of our ethos of mutuality is that we are claims-centric and we exist to pay claims. Members’ profit-share accounts are not reduced if they claim, and at PPS we believe that the so-called no claims benefits go against the grain of what insurance is all about. So if a member has a valid claim, they should not be discouraged from submitting it, and they should not be penalized because they claimed. 

Within our life risk products suite, we also offer life assurance, disability cover, critical illness, business assurance, and education products that are all intrinsically superior to similar products available in the market, because of the built-in profit-share benefits. So talking about the features of our products will not adequately convey the impact that they have on the lives of our members. So in the marketing video clip that I’m going to ask them to play, we’re going to share you one of our member’s stories. He’s going to tell you his claim story basically in his own words. He’s got a strong South African accent, so you’ve got to listen carefully. Thank you, Ben, you can play the video for us. 

VIDEO

So Stellenbosch was my destination after school. I wanted to study forestry. I was just so excited to get to Stellenbosch. I started my business in 1996, and that was tree work that I was doing. So I was climbing professionally since ’96. If we’re taking down a valuable tree, we have that log slabbed or planked or cut into blocks. Wanted to make a wine rack, so I was busy doing all the paperwork and cutting all of the little planks on the table saw, and the wood pulled just a faction askew, so my hand landed from here onto the blade. In an instant, this finger was off, the thumb was off, and I looked at my hand like this. And there were three questions that went straightaway, immediately through my mind. The one was, “Damn, I’m not going to be able to climb now for a bit.” And the second thought was, “I actually can’t believe this has happened, it’s just so crazy that this has happened.” 

And the third instant reaction was, “I’m in trouble.” It became really critical to know, okay, well, you’re actually covered. There’s a product in place for us to be able to deal with it, and to be able to be covered going forward knowing that I wouldn’t be able to actually do what I love doing. There’s a few things about PPS which appeal to me. They cover the kind of eventuality that would happen to me. The cover is enough. So for the amount of money that we’re putting in, we’re getting a good benefit back. 

On top of that, we have the added benefit of the profit-share account. When I started tree surgery professionally, it’s a dangerous occupation, so that’s why going with PPS, so I knew if something happened, I would be covered. 

Dawn Ngwenya-Dibakwane: 

Thank you, Ben. So testimonials like this are another powerful way that we market our value proposition to our members. I’ll show you some numbers later, but I just want to draw your attention to one comment in the video. You would have heard Leon Visser saying that for the amount of money he put in, he got great benefits back. This is an important point because some people may assume that the premiums for our benefits may be inflated, so that’s why we have a surplus to allocate to the profit-share account. This isn’t the case. Our products are well-priced and competitive in the market. The profit-share is funded by operating profits coming from premiums and investment returns, and Shelley has discussed earlier, and this is what mutuality is all about for us. 

We’ll now briefly touch on some other interesting offerings we have available in the PPS group and its subsidiaries. So over the years, PPS members appreciated the way in which their profits were being invested, and expressed a desire to benefit from the group’s investment philosophy. In keeping with our model that success is better shared, PPS made savings and investment solutions available to members through PPS investments. Once again, members with qualifying risk products who also have investment products are eligible to share in the investment administration and management profits. 

Then the PPS Group also created PPS short-term insurance to address members’ motor vehicle, home, and business insurance needs. In addition to a competitive base product, our short-term insurance business provides unique value-added services that speak directly to the fact that we know and understand our members. Professionals are typically very time-poor, and giving our members back time by doing administrative tasks like renewing their motor vehicle licenses on their behalf is valuable to them, especially in South Africa, where such a task can take a member away from their practice for a good few hours while they’re standing in a queue. 

PPS also has a health professions indemnity product, which was specifically designed to provide the indemnity insurance that is needed by healthcare professionals, and to help them to manage the risk profiles of their practices. The most important benefit of this product is that it enables healthcare professionals to focus on their practices, secure in the knowledge that they’re covered by a brand they know and trust. 

Our members also have access to a medical aid scheme called Profmed, which offers medical and healthcare benefits to professionals and their families. Profmed was launched by PPS more than 50 years ago, and what we’ve found is that professionals appreciate access to an efficient scheme that is known to support them, particularly when they require major procedures, expensive treatment, and extended recovery periods that other medical aids sometimes typically run away from. 

With our focus on long-term benefits and protection, we want to protect a lifetime of accumulated wealth from being eroded due to poor planning. So informed by an intimate understanding of the provisions that need to be made for beneficiaries when a member passes on. The PPS group offers a range of fiduciary services that encompass estate planning, wills drafting, and trust and estate administration. 

Research shows us that a strong correlation between financial security and sound planning advice exists. So our members access financial planning either through our large network of independent and accredited advisors, or alternatively, through the services of a PPS-employed financial advisor. But we encourage members that whatever financial decision they make has to be in consultation with their financial advisor

Okay, so let’s talk about S Cubed. Because the needs of our professional members are often specialized and complex, individual advisors are not always able to specialize in the areas that make up the vast spectrum of personal financial planning. So to fill in any gaps, advisors are able to tap into the resources that we’ve made available from the group’s specialist support services, which we’ll call S Cubed. The S Cubed team is a group of highly qualified and skilled individuals dedicated to assisting financial advisors and ultimately the members of PPS. This team of specialists is not involved in the financial advice or sales process. This remains the domain of the financial advisor, that they’re able to provide specialist input on topics like business risk structuring and techs administration support, which our members may inquire about from their financial advisors. Next slide please, Shelley. 

Before I hand back to Shelley, I just want to demonstrate our claims-centricity in real numbers in terms of what we paid out in the past year. Shelley, I think you need to click again just to show the last bubble. Great. Our members have piece of mind that in their time of need, PPS will be there to support them. We’ve extended the support to our member for almost 80 years, and they trust that we are well-positioned to continue to do this into the future. 

In 2019, PPS paid 2.3 billion rand in life insurance risk claims to members. This means that close to 22,000 members submitted their claims, meaning that we were working on just over 87 cases per working day. That turns into an average of 8.7 rand that we paid out daily in life insurance risk benefits. 

PPS remains responsive and nothing has brought this into sharper focus than the COVID-19 pandemic that’s significantly impacted our members. PPS’s response to this was immediate and extended beyond the parameters of our existing offerings, and Shelley will take you through what this looked like. 

Shelley Jones: 

Thanks, Dawn. So, when COVID hit our shores, we had to react quickly, and we did a number of things to help our members over this trying time. The first thing was to develop a claims protocol to cater specifically for the pandemic, so we would obviously provide benefits to members who became ill, but our offering extends beyond that, and we provided benefits to asymptomatic members whom had to quarantine because they were potentially exposed to the virus, even though this was outside of the benefits of our normal sickness product. And it was being a mutual that enabled us to do this. It enabled us to be flexible in how we supported our members in this challenging time, and it didn’t matter if these members were in South Africa, or if they were living internationally, we were there for them.

So on this slide you’ll actually see that 4% of our members who submitted claims for benefits were in fact international members in this period. As of the end of August, we had total COVID sickness benefit claims of almost 53 million, and this slide is slightly outdated, we actually had numbers as of the end of September, and that is up to 76 million that we have paid in sickness benefit claims. The other thing I wanted to point out in the slide is that we are a group of professionals, and we know that the group that is most affected by the pandemic were those that were in the frontline, and these were our medical professionals. And you would see that a large portion, around 83% of our claims, came from this particular group of professionals, because obviously they were far more exposed to the virus than anybody else. 

 We also did a few other things. We introduced financial relief members that meant members could enjoy certain critical benefits like life insurance for a period of time even when they were unable to pay their premiums. In some circumstances, we provided members with access to their Profit-Share accounts so that we could use the funds out of their profit-share accounts to pay the premiums on their PPS products for a period of time. This enabled them to diver their income, or other income, which had obviously been significantly reduced in the pandemic, to other essential needs that they might have had. In our short-term business, as an example, or what most of you might recognize as property or casualty insurance, we proactively reduced the premiums for benefits like motor vehicle insurance, because most South Africans were not driving much during lockdown, and this lower risk could be translated into reduced premiums for our members. 

We also then spoke to the professional communities. We deal a lot with the professional associations that our members belong to, and when we engage them, we use the insights that they provide the solutions that we put in place for our members. And it also resulted in us sponsoring PPE or personal protecting equipment that we provided to medical professionals who were in the front line of the pandemic, and we had over 13,000 members apply for PPE that we sponsored through that initiative. 

I think the last thing that we could touch on is what we did in the underwriting area. We looked at COVID-specific, or developed COVID-specific underwriting protocols for our life products, and this effectively relaxed some of our underwriting requirements and allowed members to continue to get access to new or additional products over that period. So a lot of our members weren’t able to go to medical practitioners to conduct medicals, and our labs were under a lot of pressure doing COVID testing, so they couldn’t do insurance testing. So we relaxed some of those protocols, and deferred some of those requirements for later on, so that the members could at least get product where it was required. I’m now going to give you back to Dawn, who’s going to talk to you about PRO-FiT. That’s our member engagement platform, and she’ll also share a little bit about the ways that we plan to harness the power of the broader professional community a little bit, and she’ll close us out on this webinar. Thanks, Dawn. 

Dawn Ngwenya-Dibakwane: 

Thank you, Shelley. If you can move on to the next slide for me. Thanks. The last section of our presentation will show you how we use member engagement to harness the power of mutuality for the professional community. PPS connects with its members largely through PPS-accredited financial intermediaries, who have industry-specific knowledge that enables them to offer sound advice on the issues and challenges members face.

Aligned with our strategy to build a digitally-enabled business, PPS launched PRO-FiT, an engagement platform, in 2019. This platform is designed to complement the overall member experience with enhanced digital capabilities and provide for seamless engagement. So as you can see with the name PRO-FiT, we had a little bit of fun playing around with pro for professional, fit so professionally fit, but also profit in terms of profit-share, so it’s our little inside fun that we were having with that name. 

So members can update their own details without having to contact us, and they can use the Play Zone, the Profit-Share Play Zone that Shelley told you about, to look at how to grow their profit-share. So I think I can stop talking here and let the video do the talking. Ben, if you can play our next video, which will give everyone a sense of the capabilities of this platform. 

VIDEO:

PPS PRO-FiT. The digital interactive member engagement platform is here, and it’s available to all PPS members. PRO-FiT is a simple way to take your overall member experience up a notch, with enhanced digital capabilities for seamless member interaction. Here you can view and amend your personal details, as well as access the details of your accredited PPS financial advisor. Included in the platform are features such as the ability to download your latest profit-share statement, as well as view all your PPS products, from life insurance to investments to short-term insurance, fiduciary, and even medical aid. 

 Also, if you’re interested in exploring additional PPS products, you can view the products you don’t have, and then make a request via the platform, after which your financial advisor will contact you. PRO-FiT will soon include various rewards partners from which you can benefit in a variety of ways. It’s our way of making your membership more meaningful. 

An exciting feature that you can look out for is the profit-share calculator called the Play Zone. The Profit-Share Play Zone will enable you to explore various scenarios that will help you optimize your profit-share. You’ll be able to predict what your profit-share value will be at the time of retirement, and identify how you can fund certain needs, such as post-retirement medical care. You will also have the ability to define goals, such as becoming a Profit-Share millionaire by a certain age, and then create scenarios in the Play Zone that will illustrate the impact that additional qualifying PPS products will have on achieving your goals. PRO-FiT is an experience designed for continuous enhancement. Expect additional functionality to be added regularly in order to improve self-service functionality and allow you to engage with PPS and your financial advisor digitally. Register today for PPS PRO-FiT, and get the most out of your membership with us. 

PPS. Success is better shared. PPS is an authorized FSP. 

Dawn Ngwenya-Dibakwane: 

Thank you, Ben. In keeping with the ethos of mutuality, we’ll also use the platform to gain deeper insights into our members, including their hobbies and interests. This allows us to serve them better and to offer additional lifestyle benefits that make their lives easier. 

For example, one of the offers we have enables members to get access to healthy meals through a partner called Ucook, with mealtime ingredients that are delivered to their door. And this is a healthy food option for members who don’t have time to cook, and has proven to be a valuable benefit. Also, it helps us as a business, because naturally healthy members don’t get sick as much and don’t need to claim as much, so it’s everybody contributing into the pool of professionals. 

More recently, we’ve expanded our value offers to educational support for our members’ children, through a digital program called Advantage Learn. This became even more attractive in the midst of a pandemic, where our professionals and their children are often working from their homes and in need of additional support. Strategically, building a digitized business is significant in our plans, and we intend to use PRO-FiT more extensively to engage with our members and the intermediaries who act as a key interface on our behalf. 

When deciding on who to partner with for our value-added services, we look for something that is unique which we can offer to our members. We’re soon going to be launching a travel value-add partner, which was selected because of their ability to provide adventure holidays, because we recognize some of our members would really prefer the challenge of climbing one of the great mountains of the world rather than lying on a beach, and having a partner that offers a wide range of options is appropriate, given the diverse preferences of our membership base.

At the beginning of our presentation we mentioned that we have plans to harness the power of professionals in the broader PPS community. An example of this can be seen in the slide, where we’re showing the journey of a young professional. We spent some time with young graduates and designed some features for PRO-FiT that would provide them with support when they start entering the world of work. Our CV builder, for example, will provide graduates with an easy to use template that can assist them to compile their first resume. It also allows the graduate to upload a short video clip of themselves so that potential employers are able to get a sense of the person behind the written document. 

Our work-readiness portal gives young professionals the skills and tools that are vital for their integration into the work environment. Subject matter experts will provide input into content, like how to prepare for your interview, and tips for being promotable. 

In the job opportunities section, we aim to connect young professionals with selected recruiters who are looking for graduates to employ. More established professionals who have their own businesses or practices would be able to use the portal to source young professionals for roles in their respective businesses, and this keeps the work happening within our professional membership base, which then once again feeds into the concept of mutuality. 

Lastly, our mentorship platform will allow graduates to request for mentorship from a pool of mentors that PPS establishes. These will be industry experts and professionals that may also be PPS members, who are interested in developing and nurturing professional talent in South Africa. Young professionals will be able to search for their mentors by filtering their search according to various factors, profession, location, and they can request access to a mentor through the PRO-FiT platform. 

PPS has a unique opportunity to create professionals, to connect our professionals within the community, and this is an example of how we can achieve this. Next slide, Shelley. In our introductory video that we played on PRO-FiT, you’d have heard that we’re also promoting PPS Rewards on the PRO-FiT engagement platform. As the name implies, members will be rewarded with points for completing a number of prescribed activities. Once they’ve accumulated a required number of points, these can be redeemed from a selection of retail partners, or they can also use it to boost their profit-share accounts. Reward activities will always be linked to our business objectives, some of which include lead generation, where a member would request a quotation for a product they don’t already have; consumer education, so we reward members for doing things like watching a PPS mutuality video, profit-share video, or a video of launching a new product, they can earn points for that. 

We want to do some data collection, so members who are willing to share additional insights with us, completing things like their hobbies and interests or certain questionnaires about their behaviour can also earn points. So PPS would get better insights into our members’ preferences, and this helps to inform our design of new value-added services that we continue to develop. 

And then lastly, change in member behaviour. So certain behaviours, like having members starting to download their own statements rather than requesting them through an advisor, and downloading documents rather than calling into the call center, other types of behaviour changes that are valuable to us and our processes, so we want to reward members for these types of behaviours. 

In closing, what we’ve shared here today are the ways in which we make membership more meaningful for PPS members, and we’re grateful for the opportunities to do so with you. Thank you for listening, and I think we can now open for comments, thank you. Ben, over to you. 

Ben Telfer: 

Thank you very much Dawn, and thank you Shelley. That was a fantastic overview of everything PPS is doing and your commitment to mutuality throughout your strategy and through various new and sort of well-established propositions. 

We do have a number of questions in, but again, in the audience, if you’ve got some more, some other questions for Shelley or Dawn, please do type those in, and hopefully we’ve got a good 10 minutes to ask both of them. Firstly, Dawn, I’ll come straight to you. I think you might have already answered this question, but it asks how do you select the rewards partners for the appropriate platform? 

Dawn Ngwenya-Dibakwane: 

Thanks, Ben. So we basically look at things that are going to be relevant to our professional base. So we don’t just look at retailers and so on and think, “Okay, this one is great,” but part of it is using insights from our members, but also understanding members being time-poor. So for example, a big pillar of PPS’s success is education, which is why our members are required to have an honors degree or equivalent. So in that, it made sense to us to choose advantage learn as a partner, because during the time of lockdown, kids had to learn from home and would need additional support sometimes from their parents, who don’t necessarily always have the time to weigh in on their studies, so having a program like Advantage Learn, that in South Africa has already about 200,000 student learners that are signed up, can provide support with subjects such as math and science, and then additional subjects. 

What we’ve done is that we’ve said for mathematics in particular, because our focus is first and foremost on the STEM subjects, we’ve provided that service for free to members. And then with regard to other subjects, then they get, I think, up to a 25% discount. So we look at factors that are going to save our members time and are actually going to add value. Ucook helps you to get wholesome, hearty, and healthy meals for your family, even though you might not have the time to actually prepare it, and maybe you’re not interested in ordering in. So we look at those factors that are going to provide real value for our members. 

Ben Telfer: 

Thank you very much, Dawn. Another question relating to the PRO-FiT platform, what has been the member uptake? 

Dawn Ngwenya-Dibakwane: 

So the member uptake, I don’t have the figures handy at the moment. It has gone a bit slow, but picked up with the lockdown, because we’ve also found that a lot of digitally-enabled activities have picked up during lockdown even though they might have not done so in the beginning. So in the beginning, we found that our uptake was slow, but as we move into lockdown it becomes more and more easier for people to engage with service providers in a digital way, and what we also do is we send monthly reminders and messages to our members to show them what new partners have been signed on and what they can benefit, to encourage the uptake on an ongoing basis. 

Shelley Jones: 

It’s a little bit outdated, but we had over 10,000 members who are active on the platform, that was last month sometime. So I don’t know what the current numbers are, but it is in excess of 10,000 members who’ve registered on the PRO-FiT platform. 

Ben Telfer: 

Excellent, thank you, Shelley. I’ll come to you Shelley for the next question, firstly it commends you on PPS’s response to the pandemic, and it asks about what has been the impact on the reputation of PPS, based on this response? They assume that it’s too earlier to see any growth in membership because of it, but has there been any increase in NPS or any other metrics that you’ve seen? 

Shelley Jones: 

What we can measure is the feedback that we get from the advisors that sell our products, because we have some that are tied to PPS and they only sell PPS products, but we also have advisors that sell the PPS product and other competitive products out in the market. And we’ve had very positive feedback from the broker force on the PPS reaction to it. So that is going to be our initial indicator of how well-received the items were. But we look at other metrics as well, so we’ve got good feedback on them, and the feedback was on the comprehensiveness of our response, and also the speed of our response, that they moved quickly when getting up our claims protocol so that there was clarity and people knew what they could expect. 

I think the other thing that has been a good indication is things like complaint metrics that we have. We’ve had very few complaints or issues that have come forward with claims coming through, and that’s despite a high volume of claims coming through. Most of our sickness claims that we receive at the moment are obviously COVID-related. But very few of the claims have been repudiated, because there’s clarity in what we cover, and the solution is wide. So we’ve had good satisfaction levels in terms of complaint responses with regard to COVID. I think the only other comment I can make was just anecdotal feedback from our associations that we engage with. We did this jointly with them, because they are another way in which members can express their satisfaction or dissatisfaction with providers that operate in the professional market, and the professional associations were also positive around the PPS response, to things from the protocols to the financial support that we provided to our members, that was well-received by the associations as well. 

But no other indicators yet. These are tough times in the market, so we’re going to wait and see how this reputation we’ve built over this period will translate into more members going forward, hopefully. 

Ben Telfer: 

Thank you, Shelley. A question here, has COVID had an effect on your approach to return profits to members, and as an aside, it mentions that EIOPA in Europe have advised not to issue dividens or other capital outflows given the unknown impact of COVID to solvency. So has COVID had an impact on your approach to your profit-shares and return of profits to members? 

Shelley Jones: 

That’s one I’m going to have to hold over. I don’t have feedback on that. You know we do Profit-Share allocations at the end of our financial year, so we would only be having those discussions towards the end of the year, but I am not part of those conversations at this stage. So I will put that question on hold, I’ll make a note of it, and let’s see if we can get some feedback there. We did make provisions for, obviously we alerted to our board to what we predicted was going to be the impact of COVID on our claims, and we made revisions for those, but beyond that I can’t give you an answer on it at this stage. 

Dawn Ngwenya-Dibakwane: 

I can also just jump in here, Shelley and Ben. While we won’t be able to say yet what the impact on 2020 has been on the returns, what we did experience was the effect of COVID-19 after the close of our financial year of 2019. So after our financial year ends at 31 December, and then allocate the profit-share to our members, and we declare these numbers in April of the following year. So by the time that we had to declare our numbers in April, basically the effect of COVID-19 on the markets had eaten away a significant chunk of our investment returns. So while we were able to allocate profit-share to our members, there are certain members that didn’t realize the value that they should have, especially the ones that were going to take their Profit-Share because of retirement. 

What we try to encourage is that those who are retiring try and keep the money invested so that it can recover, because taking it out at that particular time would’ve meant a drop in what they saw in their profit-share at the end of the financial year. So as Shelley says, we aren’t able to happen to say what will happen by end of 2020, but we certainly did start to see the effects by the time that we had to allocate to our members this year. 

Ben Telfer: 

Thank you for sharing what you know so far. Probably got time for a couple more questions. The next one says, obviously as mutual insurers, one of our benefits is that we can take a long-term approach. Do you find that now you’ve moved into short-term insurance, that there is a difference in how you communicate the values of mutuality between your long-term offerings and your short-term offerings? 

Dawn Ngwenya-Dibakwane: 

By virtue of the product being different in terms of long-term and short-term, essentially the communication would be different. Selling life insurance versus short-term insurance is different. But what remains is that we talk about the benefit of being a member of a company that operates under the ethos of mutuality, because even with our short-term insurance products, if you have a long-term insurance product as well as the short-term insurance, you’re able to benefit from profit-share allocations. You benefit from the risk pool of the fact that even though it would be short-term insurance, it’s still aimed at the graduate professional with the honors degree or equivalent. So it does not change our strategy, and I think it actually enhances to say that mutuality doesn’t mean that we are now only able to offer short-term product, we’re a full financial services provider, and you are able to benefit in different ways. And things that become important rather than going the route of instant gratification of what can I get out now, it becomes what value can we add? And some of the ones that we discussed are things like queuing on your behalf to renew your license disk, and we’ll also have features that are valuable to our members, such as a take me home chauffer service. 

So if you’ve been out with your friends, you’re too tired to drive home, you phone PPS short-term insurance, our concierge services, they send a drive to either take you home as a chauffer, or they can drive your car for you. If you’re in a place where you’re feeling a bit unsafe, we can send somebody to come and wait with you. So there are various things that are useful within the context of being in our country, as well as the context of being a professional and just needing certain things taken care of. So yes, the advertising and the communication will be different, but we don’t move away from the fact that we are operating under the ethos of mutuality and you benefit from being a member of this particular professional community. 

Ben Telfer: 

Excellent, thank you for that, Dawn. There’s two more questions I’ve got here both relating to marketing and brand I’d really like to get your answers to. The first one is how does PPS market its mutual brand in a way that resonates with your target market? 

Dawn Ngwenya-Dibakwane: 

Honestly this is an ever-developing challenge, because in a country where people are used to insurers offering things like cashback benefits, no-claim bonuses and so on, it does become difficult, and also as the only diversified financial services that is tailored to graduate professionals, that operates under the ethos of mutuality, it’s not something that’s very common in the South African market. So the way to market it well is to show the benefit of it, and the most tangible way to show the benefit of belonging to a mutual is demonstrating the value of profit-share, and the fact that in an environment where we’ve to so many people who are underinsured and who retire with less than enough retirement savings, something like profit-share can be used as a vehicle for wealth creation. 

We have to use the tangible benefits of what you actually get from belonging to a company that operates under the ethos of mutuality. And this is why we continue to develop platforms and engagement that demonstrate this, so people who become PPS members while they are in university have access to certain platforms that we have, like for example, those abilities to do your CV builder, access to consumer education about how to manage their finances, and so on, and we really just try to demonstrate tangible benefits in order to say why mutuality is beneficial, and try and explain the nature of mutualistic symbiosis in a setting like this. 

Ben Telfer: 

Thank you very much, Dawn. Unfortunately, I think that’s all we’ve got time for. There are a few more questions that I’d love to ask you, but unfortunately we have run out of time, but again, if anybody has got any more questions, or you’re watching this recording and you would like to ask Shelley and Dawn some followup questions on their excellent presentation, please do send them in, and I know Shelley and Dawn are very happy to answer them. 

So just before I leave you today, this is episode three in our Mutual Advantage series, so if you’d like to watch any past episodes on how other ICMIF members are leveraging their mutuality for competitive advantage, you can see all the past recordings and the presentations via that URL on screen.

So just a final thank you to Shelley and Dawn for joining us today, thank you again for sharing so much on what PPS are doing. Thank you everyone for joining, and enjoy the rest of your day. Goodbye. 

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