PPS Mutual has shared pre-tax profits of 5% of premiums with its members for the 2022-23 financial year, under its profit-share arrangement.
The insurer says this equates to a post-tax 3.5% profit-share rate and notes that on top of this, it has assigned a further 3.9% of opening profit-share balances (net of tax) leading to a total post-tax profit-share assignment of $2.2 million.
The company says that since its inception seven years ago, it has consistently shared profits with its members every year.
“The profit-share pool has more than tripled in three years – from A$2.4 million in 2019-20 to A$7.9 million in 2022-23 which reflects the robust performance of PPS Mutual’s life insurance business in Australia.”
PPS Mutual notes it’s the only retail life insurance company in Australia to share profits with its members.
Insurance premiums are pooled to cover claims, operational costs, and future capital reserves and “…any surplus money is deemed profit, and all PPS Mutual members are entitled to a share. Assignment rates vary each year and members enjoy profit sharing privileges even in the event of a claim.”
PPS Mutual Chief Executive Michael Pillemer says that for seven years “…we’ve proudly shared profits with the …professionals we serve in Australia, a feature that sets us apart in the evolving risk insurance industry.”
He says that over the years “…we’ve not only maintained a market leading retention rate but have also received resounding support from our valued advisers, affirming the tangible benefits of our approach.”
Pillemer cites profit sharing and the mutual model as key drivers of the company’s strong client retention and satisfaction.
…the insurer has the lowest lapse rate in the industry…
The insurer says it has the lowest lapse rate in the industry at just 4.3% compared to an average of 15%.
“PPS Mutual’s core philosophy revolves around aligning our business interests with the well-being of our valued members. We take pride in being recognised as the [Adviser Ratings] retail insurer of the year …”
PPS Mutual continues to strengthen its commitment to creating more sustainable opportunities for its accredited advisers, exemplified by its low lapse rate.
The insurer says that additionally this year, it “…demonstrates its dedication to delivering higher value to its advisers and clients, with one advisory firm’s PPS Mutual clients receiving a … profit-share assignment exceeding $272,000, and another advisory firm seeing their PPS Mutual clients’ profit-share account balances reach a cumulative total of over $1 million.”
…life insurance policies are available only through independent financial advisers…
The company’s life insurance policies are available only through independent financial advisers.
It notes that members must retain their policies for 10 years to gain partial access to their profit-share funds. “Members can withdraw up to 5% of the balance of their profit-share account balance annually. Full access is granted after 20 years or when members reach age 65, and on death, terminal illness, and certain other events.”
