PPS Mutual Celebrates Strong Growth in Australia

PPS Mutual reports that it’s now serving more than 5,500 professional members and their financial advisers as the business celebrates its five-year milestone operating in the Australian retail life insurance market.

The insurer says in a statement that since launching in 2016, it now has:

• 15,000 in-force benefits
• More than $35 million of in-force premiums
• An average premium three times the industry average at $6,432
• A lapse rate one-quarter that of the industry at three percent per annum
• The highest Net Promoter Score of all insurers from the Beddoes Adviser Survey 2021

The statement says that PPS Mutual’s results have helped to “…underpin the continued operational expansion of its national footprint in Australia, accredited adviser numbers and key enhancements to its member-centric service offering”.

It notes that for the past four years, the business has made profit-share payments to its members, “..a unique feature of the PPS Mutual model where insured customers (members) share in the profits of the insurance they buy”.

The company says that a fifth profit-share assignment will be made later in 2021. The most recent assignment to members comprised profit derived from 7 percent of premiums and 4.5 percent of opening balances (net of tax).

PPS Mutual Chief Executive, Michael Pillemer says that as the company celebrates its five-year anniversary “…it has been wonderful to see the compelling Profit-Share case studies emerge”.

“We have seen for example one of our accredited advice firms’ clients receiving profit-share assignments of over $380,000, and individual clients with profit-share balances of over $10,000 and even $20,000. These represent solid proof points of success at the heart of the PPS Mutual model.”

Strategic point of difference

He adds that the company set out at inception to differentiate itself from the insurance business model “…that focuses on short-term profits to shareholders, rather than the long-term best interests of the lives insured. Ultimately, our mutual model allows us to truly put our professional members first”.

Pillemer notes that customer loyalty to the mutual model and its benefits is high, as the PPS Mutual lapse rate is three percent versus the industry average of 13 percent.

He says one of the key focus areas is to treat all members “…equitably and with transparency on product design and policy terms”.

…We strongly oppose … the self-serving introduction of front-loaded discounts, takeover terms, special deals, discounted loadings and price matching…

“We strongly oppose, for example, the self-serving introduction of front-loaded discounts, takeover terms, special deals, discounted loadings and price matching offered by other insurers, as we believe these offers come at the expense of existing customers. This is one of the main reasons for the spiralling premium increases in the industry in recent years,” Pillemer states.

He says that premium reductions for new members have been passed back to existing members and any material premium increases implemented gradually over a three-year period in order to minimise the impact on existing members.

Pillemer says that another focus for the business is to help its adviser network advocate for the value that financial advice delivers to Australian professionals.

“All of our advisers go through an individual accreditation process to be able to best advise their clients on PPS Mutual products.”

As PPS Mutual’s product eligibility is limited to 24 defined professional occupations, the insurer can offer specialised cover specific to the genuine needs of the client, the statement says.