Discovery results reflect behaviour focus

(Shutterstock)
(Shutterstock)
Johannesburg - Discovery's normalised profit from operations for the six months ended December 2013 increased to R2 383m, up 21% from the comparable 2012 period.

New business Annual Premium Income was up 19% to R 5 883m.

“We are pleased with the performance across Discovery’s businesses over the past six months," said Adrian Gore, Group CEO on Thursday.

Discovery Health increased its new business by 15% to R2 623m and operating profit by 13% to R860m.

Membership of Discovery Health Medical Scheme managed by Discovery Health was up 4%, loss ratios declined and lapses and plan downgrades remained low.

Discovery Health Medical Scheme achieved a R1.4bn surplus and solvency reserves of R9.7bn.

Discovery Life experienced earnings growth of 21%, driven by strong new business.

Discovery Invest’s assets under management increased by 35% to R36bn and new business increased by 26% to R652m.

As for Discovery Insure, Gore said during the review period, the company focused on further product innovation, building the distribution capability, service innovation and enhancing the value of the Vitalitydrive model.

In the UK, Discovery’s combined businesses of PruHealth and PruProtect grew their combined profit by 27% to R359m and new business by 35% to R982m with a client base at 774 000 lives.

UK Market

A critical development in the UK market has been the implementation of Discovery-based product integration across PruHealth and PruProtect.

New business at Ping An Health in China is gaining traction has doubled over the period to R138m and is predominantly driven by Group Insurance sales.

For the six months ended December 2013 Discovery's normalised profit from operations was up 21% to R2 383m.

New business API was up 19% to R5 883m and cash generated from operations was R1.3bn.

"The period reflects the increasing relevance of the Discovery [JSE:DSY] business model, especially in the light of the global impact of chronic diseases of lifestyle, the challenge of rising healthcare costs and consumers turning to protection products to mitigate uncertainty.”

Gore said understanding the triggers of behaviour change and designing the appropriate incentives enables Discovery to achieve lower mortality and morbidity rates, better lapse rates and claims experience.

He said Discovery continued its strategy of investing in the further development of the model to ensure that it can be replicated across South African businesses, international markets and adjacent industries.

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