Discovery Holdings said on Friday that earnings for the year ended June are expected to be at least 20% higher than the year before.

"Discovery's strong performance during the interim financial reporting period to 31 December 2010 continued over the first quarter of the 2011 calendar year, with all operating entities performing in line with expectation," the company said.

The strong performance of Discovery's South African businesses continued over the first quarter.

Discovery Health's total medical scheme membership surpassed the 2.5 million lives level, with ongoing low lapse levels. "In the context of the acquisition of a number of large closed schemes in the comparative period, new business growth remained strong," it said.

At Discovery Life risk new business (excluding ACI's) for the 9-month period grew at similar rates to those achieved during the first 6-months, with mortality and morbidity experience performing better than expected, and lapses tracking in line with assumption.

For Discovery Invest, retail assets under management reached 16.5 billion rand during June 2011, with continued beneficial asset mix and excellent fund performance.

In addition to the performance of the existing businesses, the period under review also saw the launch of Discovery Insure, Discovery's entry into the short-term insurance market. Discovery Insure is the next manifestation of the Discovery model, and is complementary to Discovery's existing businesses.

"Initial interest in the Discovery Insure offering has been high, and above expectation," the group said.