Discovery’s shared-value insurance business model and organic growth approach drive continued strong performance
23 February 2017
Discovery News
Discovery’s shared-value insurance business model and organic growth approach drive continued strong performance
Discovery News - Feb 23, 2017 08:05 GMT
A combination of three main drivers contributed to our robust performance; our Vitality Shared-Value Insurance model being employed across 14 markets
Discovery’s shared-value insurance business model and organic growth approach drive continued strong performance
Interim financial results for the six months ended 31 December 2016
• Normalised profit from operations up 13% to R3 412 million
• Headline earnings up 14% to R2 023 million
• Normalised headline earnings up 3% to R2 184 million
• New business growth up 15% to R8 245 million
Johannesburg, South Africa – 23 February 2017. Discovery today presented its results for the six months ended 31 December 2016. There was strong delivery across the Group with new business and normalised profit from operations increasing by 15% and 13% to R8 245 million and R3 412 million, respectively. This was despite a combination of falling exchange and interest rates in the United Kingdom, which adversely impacted Group earnings over the period by 4%.
“A combination of three main drivers contributed to our robust performance; our Vitality Shared-Value Insurance model being employed across 14 markets, our organic approach to growth and our sophisticated capital management philosophy. In addition to this, progress was made across all of our businesses, putting us on course to reach our 2018 ambition. We continue to gain a deeper understanding of the actuarial dynamics underlying our model and from this have seen systemic improvements of engagement, behaviour change, mortality, morbidity, claims experience and value sharing,” said Discovery Chief Executive, Adrian Gore.
The efficacy of the Group’s organic growth methodology was shown over the period by performance of existing businesses growing operating profit by 11% to R3 786 million and new business by 9% to R6 477 million. Emerging businesses, Discovery Insure, Ping An Health and Vitality Group (a consolidation of The Vitality Group and Discovery Partner Markets businesses) delivered growth of 43% in new business to R1 768 million. These emerging businesses are now substantial, with Discovery Insure covering more than 160 000 vehicles. Ping An Health is the leading health insurer in China and new business has grown by 55% over the period; and Vitality Group is a growing global franchise that is active in 12 markets.
New initiatives received an investment of 7% of earnings, equal to R244 million. Investment went towards the Group’s banking aspiration, the Global Vitality Network driven by Vitality Group, the Discovery Insure commercial offering, umbrella funds in Discovery Invest and an investment venture in the United Kingdom.
During the period under review, Discovery continued to apply its capital management philosophy based on maintaining independently robust
