Discovery maintains healthy performance

Johannesburg - Healthcare insurer Discovery Holdings [JSE:DSY] said on Friday that a strong performance continued into the first quarter of the year, with all its entities performing in line with expectation.

For Discovery Invest, retail assets under management reached R16.5bn during June, the group said.

In a trading statement for the nine months ended March, Discovery said it continued to make significant progress towards achieving quality growth in its South African businesses, scale, profitability and relevance in its international business and launching new businesses.

On the basis of current performance, and recognising the effect of the accounting entries relating to the acquisition of Standard Life Healthcare, earnings per share for the financial year to June were expected to be at least 20% higher than those reported during the 2010 financial year.

In addition, on a normalised basis - which adjusts for the effect of transactions related to the Standard Life Healthcare acquisition, and therefore provides a more accurate measure of the operating performance of the group - normalised headline earnings per share were also expected to show an improvement of more than 20% over the prior period, the group said.

Discovery reiterated its intention to introduce a new class of equity capital.

For its South African operations, Discovery Health 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.

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.

For its international operations Discovery said it continued to pursue two distinct strategies, including a focus on achieving scale, relevance and profitability in the UK with PruHealth and PruProtect, and operationalising the joint ventures in China and the US with the Ping An Group of China and Humana Inc, respectively.

 
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