Welcome!

News Feed Item

Innovative behaviour-based model drives global Discovery growth

- Normalised profit from operations up 23% to USD 477.1 million

JOHANNESBURG, Sept. 3, 2014 /PRNewswire/ -- Discovery Limited Group Chief Executive, Adrian Gore, today presented the Group's annual financial results for the year ended 30 June 2014.  Discovery posted normalised profit from operations of USD 477.1 million, a 23% increase from the previous year – a figure driven strongly by new business growth of 15% to USD 1 169.3 million.

Discovery Logo

Gore commented, "The past financial year marked a period of strong performance for Discovery. There has been intense activity across our primary market in South Africa, our second primary market in the UK as well as our partner markets in China, the US, Singapore, and Australia. More importantly, we have done considerable work in refining the Discovery behaviour-based insurance model, which gears Discovery to address some of today's most critical societal problems in an innovative way."

In a difficult economic environment, Discovery's business model and strategy continue to deliver positive financial results, an aspect which Gore attributes to the responsiveness of the business model to a complex macro-economic environment. He continued to explain that consumers globally are expecting companies to play a socially-progressive role where the bottom line is not the only driving force of a company's actions. Given this increasing trend, insurance companies are well placed to meet this expectation, given their large risk pools and mandate to provide protection for life's uncertainties and risks.  Importantly, many of these insurance risks are driven by member behaviour, which can be changed through tools and incentives.

Gore commented, "Discovery's business model is a powerful asset as it enables a composite view of a client's risk behaviour, which can include their nutrition and exercise habits, as well as their driving behaviour. By rewarding better behaviour, the actuarial dynamics improve considerably, resulting in savings across the business. These resultant risk savings are channeled back to the incentives required to deliver the positive behaviour change that ultimately are of equal benefit to our client."

The outcome is excellent member receptivity in all markets: favourable claims and lapse trends across all businesses; volume and revenue uplift for wellness and reward partners across Vitality, DiscoveryCard, and Discovery Insure; and a positive impact on healthcare costs, life expectancy, and road safety.

In Discovery's primary market of South Africa, Discovery Health's performance exceeded expectation with operating profit increasing 10% to USD 177.8 million, after continued efficiencies were passed onto Discovery Health Medical Scheme through a planned scale-related reduction in administration fees. In addition, Discovery Health new business increased 4% to USD 479.4 million; and lives under management for all schemes grew to 2.9 million.

Discovery Life demonstrated exceptional operating profit growth of 23% to USD 248.4 million over the period driven by new business growth of 6% to USD 193.0 million, better-than-expected claims and lapse results, improved renewal efficiencies, and disciplined expense control. Experience variances were positive by USD 54.8 million and the business generated USD 40.5 million in cash over the period, before allowing for the repayment of financial reinsurance.

Gore commented, "Discovery Life's performance further validates the efficacy of the model, and its unique shared value attributes. The model not only creates value for clients as they experience better value for money and policyholder returns, but the insurer benefits from superior actuarial dynamics and higher profit margins. This is the basis for successfully exporting the model to the UK and Asia."

Discovery's savings and investments arm Discovery Invest delivered a better-than-expected set of results with operating profit increasing 50% to USD 31.7 million, driven by the high growth of products sold and strong performance of the market. Assets under management increased to USD 4 billion, with new business API increasing by 30% to USD 133.8 million.

Discovery Insure has been one of the stand-out performers for Discovery over the past year; quickly developing into one of the fastest-growing short-term insurers in South Africa. New business was exceptional with 73% growth to USD 60.6 million and despite this growth, the business has contained the loss ratio and lapse rates. "Discovery's behaviour-based insurance model in short-term insurance is demonstrating the desired linkages between incentives and behaviour change, and creating further unique and innovative big data pathways to protect members and their assets," says Gore.

In partnership with US-based Cambridge Mobile Telematics, Discovery Insure launched a ground-breaking smartphone solution to accurately monitor complex driver behaviour at a granular level, and encourage safer driving in an intuitive, cost effective, and member-friendly way.

In Discovery's second primary market of the United Kingdom, the joint businesses of PruHealth and PruProtect delivered a combined operating profit of USD 60.2 million, up 33% from the previous period; new business growth of 35% to USD 204.1 million; and a combined member base of close to 800,000.

Gore said of the UK business, "The scale and relevance of Discovery's UK businesses reflect our vision to build an exemplar of the SA model and assets, manifesting in the best protection business in the UK. We have done considerable work to further build a strong foundation in the UK in terms of product design, the distribution network across direct and intermediary channels, an investment in the client journey and lastly, building the Vitality brand."

In the partner markets of China, US, Singapore, and Australia where Discovery has joint ventures with leading insurers, the company continued its investment in product development, building out the sales and distribution capabilities and marketing initiatives. Ping An Health entrenched its position as the largest and fastest-growing health insurer in China with an expanded individual product range, an enhanced service to brokers and clients, and leveraging both internal and external distribution channels. This resulted in excellent new business growth of 119% to USD 32.5 million. Gore commented, "We are starting to see the growth of a new product category in China with many members being first-time purchasers of a comprehensive private health insurance product.  The work done by Ping An Health over the past year positions the company well to grow this potential market."

In the US and Asia, Discovery invested in further developing the structure of Vitality. In the US, The Vitality Group is increasingly being acknowledged as the top wellness provider. Key developments included product and benefit enhancements, new Vitality partners, the strengthening of The Vitality Group's sales and distribution capability, and superior levels of members' engagement compared to industry.

Concluding with comments on Discovery's youngest partnership, a joint venture with insurance giant AIA in Singapore and Australia, Gore said, "AIA Vitality's early data illustrates the relevance of Discovery's business model to the Asian market where the products have gained instant recognition as being leading risk products, as judged by both the industry and intermediaries."

Logo - http://photos.prnewswire.com/prnh/20140903/142506

SOURCE Discovery Limited (DSY)

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Extracting business value from Internet of Things (IoT) data doesn’t happen overnight. There are several requirements that must be satisfied, including IoT device enablement, data analysis, real-time detection of complex events and automated orchestration of actions. Unfortunately, too many companies fall short in achieving their business goals by implementing incomplete solutions or not focusing on tangible use cases. In his general session at @ThingsExpo, Dave McCarthy, Director of Products...
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
Businesses and business units of all sizes can benefit from cloud computing, but many don't want the cost, performance and security concerns of public cloud nor the complexity of building their own private clouds. Today, some cloud vendors are using artificial intelligence (AI) to simplify cloud deployment and management. In his session at 20th Cloud Expo, Ajay Gulati, Co-founder and CEO of ZeroStack, will discuss how AI can simplify cloud operations. He will cover the following topics: why clou...
The Internet of Things (IoT) promises to simplify and streamline our lives by automating routine tasks that distract us from our goals. This promise is based on the ubiquitous deployment of smart, connected devices that link everything from industrial control systems to automobiles to refrigerators. Unfortunately, comparatively few of the devices currently deployed have been developed with an eye toward security, and as the DDoS attacks of late October 2016 have demonstrated, this oversight can ...
Without a clear strategy for cost control and an architecture designed with cloud services in mind, costs and operational performance can quickly get out of control. To avoid multiple architectural redesigns requires extensive thought and planning. Boundary (now part of BMC) launched a new public-facing multi-tenant high resolution monitoring service on Amazon AWS two years ago, facing challenges and learning best practices in the early days of the new service. In his session at 19th Cloud Exp...
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain. In this power panel at @...
Kubernetes is a new and revolutionary open-sourced system for managing containers across multiple hosts in a cluster. Ansible is a simple IT automation tool for just about any requirement for reproducible environments. In his session at @DevOpsSummit at 18th Cloud Expo, Patrick Galbraith, a principal engineer at HPE, discussed how to build a fully functional Kubernetes cluster on a number of virtual machines or bare-metal hosts. Also included will be a brief demonstration of running a Galera MyS...
Internet-of-Things discussions can end up either going down the consumer gadget rabbit hole or focused on the sort of data logging that industrial manufacturers have been doing forever. However, in fact, companies today are already using IoT data both to optimize their operational technology and to improve the experience of customer interactions in novel ways. In his session at @ThingsExpo, Gordon Haff, Red Hat Technology Evangelist, will share examples from a wide range of industries – includin...
"We build IoT infrastructure products - when you have to integrate different devices, different systems and cloud you have to build an application to do that but we eliminate the need to build an application. Our products can integrate any device, any system, any cloud regardless of protocol," explained Peter Jung, Chief Product Officer at Pulzze Systems, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
@DevOpsSummit at Cloud taking place June 6-8, 2017, at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developm...
"We are an all-flash array storage provider but our focus has been on VM-aware storage specifically for virtualized applications," stated Dhiraj Sehgal of Tintri in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Between 2005 and 2020, data volumes will grow by a factor of 300 – enough data to stack CDs from the earth to the moon 162 times. This has come to be known as the ‘big data’ phenomenon. Unfortunately, traditional approaches to handling, storing and analyzing data aren’t adequate at this scale: they’re too costly, slow and physically cumbersome to keep up. Fortunately, in response a new breed of technology has emerged that is cheaper, faster and more scalable. Yet, in meeting these new needs they...
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
According to Forrester Research, every business will become either a digital predator or digital prey by 2020. To avoid demise, organizations must rapidly create new sources of value in their end-to-end customer experiences. True digital predators also must break down information and process silos and extend digital transformation initiatives to empower employees with the digital resources needed to win, serve, and retain customers.