PPS Mutual Hits 10,000-Member Milestone

PPS Mutual reports it has reached the 10,000-member mark in its Australian business.

This marker was reached and exceeded during the second half of 2023, and described by CEO, Michael Pillemer, as “…a big milestone for us.”

Pillemer reasons that PPS Mutual’s now 10,000+ pool of members effectively equates to a life insurance pool of 20,000 elsewhere, given he says the average premium for its member pool is approximately twice that of the rest of the industry.

The value of this member pool is enhanced further, according to Pillemer, because of the strong future built-in earnings growth associated with a pool of insured lives which boasts an age demographic where more than 50% of its members are age 40 or younger. Referring to the white collar professionals group specifically targeted by the insurer, Pillemer says “These are young doctors, young accountants, young lawyers whose earnings, cover and premiums are all going to increase rapidly over the years to come.”

Notwithstanding the current PPS Mutual member pool holds such a young demographic, Pillemer says the achievement of an average premium that is around twice the amount of the industry average “…is because we focus on professionals.”

Pillemer revealed the firm’s profit share pool – still a unique feature within the Australian retail life insurance market – has now risen to $8.8 million, with $7.9 million allocated to individual accounts as recently reported in November 2023 (see: PPS Mutual Profit Share Triples).

After almost eight years operating in the Australian retail advised sector, Pillemer concedes it is still too early to make an assessment of the pool’s claims experience outcome in relation to its Australian competitors. He notes, however, that the firm is beginning to receive some credit from reinsurers, which hold a significant amount of the PPS Mutual insurance risk, based on the performance of its income protection insurance portfolio. Not enough time has elapsed, however, for any reasonable assessments in relation to the lump sum books of cover offered by the insurer.

While reporting solid growth of the firm’s member pool, particularly over the last three years, Pillemer notes the sector has been significantly impacted by regulatory changes and other challenges since PPS Mutual opened its Australian doors almost eight years ago. But he gave credit to the stability of staff and management numbers during this period of upheaval, noting an overall staff turnover of less then 5%.

Pillemer remains positive that the tide has started to turn for financial advisers in Australia: “We’re near or at the bottom of that cycle,” he says Pillemer, and stresses that the advice practices that succeed in future will be those which can attract new talent into their business. He also believes advice businesses are generally in better shape today “…because it’s been the better businesses which have generally survived.”