JOHANNESBURG - The March 2025 financial year marks a record-breaking performance for PPS, a major player in South Africa's insurance sector, thanks to its unique mutual business model.
eNCA spoke with Isaac Smit, CEO of PPS, to explore how the company’s members share in its profits, and even its losses.
Unlike traditional insurance companies, PPS operates as a mutual, meaning it doesn’t have external shareholders.
This allows the company to focus entirely on its members, returning profits directly to them rather than to investors.
The process works by collecting premiums, paying claims, and covering operational costs.
After all the expenses are accounted for, the operating profit is returned to the members.
However, this isn’t a direct payout; instead, it accumulates in individual members’ profit share accounts, where it can grow through investments.
Members are only paid out when they leave the organization, giving them a long-term stake in its success.
Smit explains, "We invest the money and the returns from those investments generate further profits for our members."
Each year, PPS shows its members how their profit-sharing accounts have grown.
For members, this is an opportunity to not only protect their lives but to build wealth in tandem with the company's success.
While PPS typically doesn’t take back profits, Smit acknowledges that it is possible in the case of a loss.
That said, PPS has weathered difficult times without resorting to this, including during the 2008 financial crisis and the uncertainty of the COVID-19 years.
In 2025, the company exceeded expectations, with an operating profit of 1.3 billion, buoyed by a favorable investment market and overseas ventures in Australasia.
But while profit-sharing is a compelling feature, insurance remains the priority for PPS. Smit emphasizes that the ultimate goal is to provide peace of mind for members, ensuring they are well taken care of when a claim event occurs.
Despite challenges on the life side in 2025, the organization remains committed to fulfilling its core promise—security for its members.
This mutual model has positioned PPS as one of the largest and most successful mutual organizations in Africa, proving that when members share in both profits and losses, they become more invested in the company’s long-term success.