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
DX World EXPO, LLC, a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Conference Guru has been named “Media Sponsor” of the 22nd International Cloud Expo, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. A valuable conference experience generates new contacts, sales leads, potential strategic partners and potential investors; helps gather competitive intelligence and even provides inspiration for new products and services. Conference Guru works with conference organizers to pass great deals to gre...
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and shared the must-have mindsets for removing complexity from the develop...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
The next XaaS is CICDaaS. Why? Because CICD saves developers a huge amount of time. CD is an especially great option for projects that require multiple and frequent contributions to be integrated. But… securing CICD best practices is an emerging, essential, yet little understood practice for DevOps teams and their Cloud Service Providers. The only way to get CICD to work in a highly secure environment takes collaboration, patience and persistence. Building CICD in the cloud requires rigorous ar...
Companies are harnessing data in ways we once associated with science fiction. Analysts have access to a plethora of visualization and reporting tools, but considering the vast amount of data businesses collect and limitations of CPUs, end users are forced to design their structures and systems with limitations. Until now. As the cloud toolkit to analyze data has evolved, GPUs have stepped in to massively parallel SQL, visualization and machine learning.
"Evatronix provides design services to companies that need to integrate the IoT technology in their products but they don't necessarily have the expertise, knowledge and design team to do so," explained Adam Morawiec, VP of Business Development at Evatronix, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
"ZeroStack is a startup in Silicon Valley. We're solving a very interesting problem around bringing public cloud convenience with private cloud control for enterprises and mid-size companies," explained Kamesh Pemmaraju, VP of Product Management at ZeroStack, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Large industrial manufacturing organizations are adopting the agile principles of cloud software companies. The industrial manufacturing development process has not scaled over time. Now that design CAD teams are geographically distributed, centralizing their work is key. With large multi-gigabyte projects, outdated tools have stifled industrial team agility, time-to-market milestones, and impacted P&L stakeholders.
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Enterprises are adopting Kubernetes to accelerate the development and the delivery of cloud-native applications. However, sharing a Kubernetes cluster between members of the same team can be challenging. And, sharing clusters across multiple teams is even harder. Kubernetes offers several constructs to help implement segmentation and isolation. However, these primitives can be complex to understand and apply. As a result, it’s becoming common for enterprises to end up with several clusters. Thi...