DISCOVERY plans to expand its Vitality business partnership model to nine countries, in addition to the UK and SA, by the end of this year.
It also saw an opportunity to enter the umbrella funds and asset management markets, CEO Adrian Gore said on Thursday. For asset management capability, Discovery uses Investec Asset Management — a partnership that Mr Gore described as "great". But if Discovery were to start its own asset management company, it would complement the insurance businesses it has developed.
Discovery was started in 1992 by Mr Gore and Barry Swartzberg, who were university friends and actuarial science students. They set up Discovery after leaving Liberty Life and in the process, introduced innovations to medical savings.
On top of its medical aid, investment, life and general insurance offering, Discovery is working to acquire a banking licence, which would enable it to enter the retail banking market in the next two to three years.
As part of its plans to plug the Vitality model into other global insurers, Discovery last year restructured its joint venture model with its insurance partners overseas and adopted what it called Discovery Partner Markets.
Through Discovery Partner Markets the company will plug Vitality into other insurers globally with limited capital deployment and will earn fees, rather than profit share.
Vitality originally started as a wellness programme encouraging people to lead healthy lifestyles. In diversifying from medical aid to short-term insurance, Discovery replicated this model to encourage good driving behaviour.
Discovery has partners in Asia, through Ping An Health in China and insurer AIA.
Other partners are Generali in Europe and John Hancock in North America. This year, it is expanding the Vitality partnership to other insurance companies, such as Canadian-based Manulife. It plans to expand to Germany and France through Generali.
In the UK and SA, Discovery offers Vitality through its own insurance companies.
Mr Gore said he expected profit for the Vitality business in the UK to increase to R900m-R1bn in the full year to June.
In the six months to December last year Vitality Life posted a 28% rise in normalised profit from operations to R343m and Vitality Health was down 43% to R93m.
In the period under review, Discovery Health increased normalised profit from operations by 11% to just more than R1bn, Discovery Life grew 9% to R1.6bn and Discovery Invest’s normalised profit from operations was up 25% to R238m.
Mr Gore said he expected Discovery Insure, which was started about five years ago, to break even by the end of this calendar year.
At a group level, Discovery grew operating profit by 7% to R3bn and new business was up 27% to R8.4bn in the six months ended-December 2015.
The company said growth in profit had been muted by investments in new initiatives, which rose 64% to R402m.
In the UK, the company wrote off about £5m related to systems. Mr Gore said this was a one-off event.
Discovery shares ended the day down 3.56% at R115.25.
PLANS: Adrian Gore, CEO of Discovery at the results presentation at the Wanderers Club in Johannesburg. Picture: RUSSELL ROBERTS
DISCOVERY plans to expand its Vitality business partnership model to nine countries, in addition to the UK and SA, by the end of this year.
It also saw an opportunity to enter the umbrella funds and asset management markets, CEO Adrian Gore said on Thursday. For asset management capability, Discovery uses Investec Asset Management — a partnership that Mr Gore described as "great". But if Discovery were to start its own asset management company, it would complement the insurance businesses it has developed.
Discovery was started in 1992 by Mr Gore and Barry Swartzberg, who were university friends and actuarial science students. They set up Discovery after leaving Liberty Life and in the process, introduced innovations to medical savings.
On top of its medical aid, investment, life and general insurance offering, Discovery is working to acquire a banking licence, which would enable it to enter the retail banking market in the next two to three years.
As part of its plans to plug the Vitality model into other global insurers, Discovery last year restructured its joint venture model with its insurance partners overseas and adopted what it called Discovery Partner Markets.
Through Discovery Partner Markets the company will plug Vitality into other insurers globally with limited capital deployment and will earn fees, rather than profit share.
Vitality originally started as a wellness programme encouraging people to lead healthy lifestyles. In diversifying from medical aid to short-term insurance, Discovery replicated this model to encourage good driving behaviour.
Discovery has partners in Asia, through Ping An Health in China and insurer AIA.
Other partners are Generali in Europe and John Hancock in North America. This year, it is expanding the Vitality partnership to other insurance companies, such as Canadian-based Manulife. It plans to expand to Germany and France through Generali.
In the UK and SA, Discovery offers Vitality through its own insurance companies.
Mr Gore said he expected profit for the Vitality business in the UK to increase to R900m-R1bn in the full year to June.
In the six months to December last year Vitality Life posted a 28% rise in normalised profit from operations to R343m and Vitality Health was down 43% to R93m.
In the period under review, Discovery Health increased normalised profit from operations by 11% to just more than R1bn, Discovery Life grew 9% to R1.6bn and Discovery Invest’s normalised profit from operations was up 25% to R238m.
Mr Gore said he expected Discovery Insure, which was started about five years ago, to break even by the end of this calendar year.
At a group level, Discovery grew operating profit by 7% to R3bn and new business was up 27% to R8.4bn in the six months ended-December 2015.
The company said growth in profit had been muted by investments in new initiatives, which rose 64% to R402m.
In the UK, the company wrote off about £5m related to systems. Mr Gore said this was a one-off event.
Discovery shares ended the day down 3.56% at R115.25.
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