Press release - 5 March 2014 11:31

Discovery CEO, Adrian Gore: "South Africa has the talent and ability to build great businesses”

"South Africa has the talent and ability to build great businesses,” said Adrian Gore in his opening remarks at the 2014 Discovery Leadership Summit. “It is the quality of our leadership that will enable or stifle this.” The welcome address from the Discovery Group CEO set the scene for a gathering focused on leadership in business, government and civil society.

The central question at the Summit – themed Intellectual Capital. Shared – is how people in South Africa can be outstanding leaders, considering our unique complexities and seemingly intractable problems.

Gore recanted a recent breakfast meeting attended by Nobel Peace Prize laureate, Henry Kissinger. The acclaimed US statesman, who once said, “Each success only buys an admission ticket to a more difficult problem,” shared insights on the difference between how China and the West solve their problems. Gore related, “The West sees problems as an aberration. In contrast, China sees problems as ongoing, with one set of problems then naturally leading to another set.”

Gore believes that South Africa adopts the Western view to problem solving. “However, I think we should be taking some lessons from the Chinese. Years ago we faced the challenges of HIV/AIDS, poverty and the brain drain. We saw them as intractable. But we managed to handle them, and some have receded to quite an extent. Some of them have metamorphosed into other problems such as corruption, labour disputes, inequality and a universal health system. This is what our leaders are dealing with today. Problems do not go away – rather they change and transform. How we manage them is what counts.”

He then went on to explain how loss aversion in behavioural economics affects peoples’ decision making. “There must be something to lose when solving problems,” said Gore. “It’s important to look at how people make decisions under fear of risk. Interestingly, there is more motivation for decision makers in how they perceive the value of potential loss versus that of potential gain. In essence, the fear of loss clearly and significantly exceeds the fear of gain. This can be a huge motivator.”

He used an analogy based on research into golfers. Over 2.5 million putts of professional golfers were analysed and a significant improvement was found when putting for a par (which would potentially result in a loss) than in putting for a birdie (which would potentially result in a gain). “This is a clear demonstration of loss aversion at work,” Gore explained. “Playing with the aim of avoiding a bogey serves as powerful motivation.”

“But golf is a simple game and life is complex and volatile,” Gore continued. “Our leaders in all areas must have clearly defined goals. This will serve to trigger a loss aversion mind-set for them and keep them focused.”

Gore noted how some of the Summit speakers have had huge potential losses to deal with. “Former US Federal Reserve Chairman Dr Ben S. Bernanke had to address enormous risks facing the US economy and past Finance Minister Trevor Manuel took responsibility for the economy in a newly democratic South Africa. These are complex times. We must manage problems well and grasp each opportunity for South Africa to reach its potential.”

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Discovery information

About Discovery Limited

Discovery Limited is a South African-founded financial services organisation that operates in the healthcare, life assurance, short-term insurance, savings and investment products and wellness markets. Founded in 1992 by the current Group Chief Executive Officer Adrian Gore, Discovery was guided by a clear core purpose – to make people healthier and to enhance and protect their lives. Underpinning this core purpose is the belief that through innovation Discovery can be a powerful market disruptor.

The company, with headquarters in Johannesburg, South Africa, has expanded its operations globally and currently serves over 6.1 million clients across South Africa, the United Kingdom, the United States, China and Singapore. Vitality, Discovery’s wellness programme, is the world’s largest scientific, incentive-based wellness solution for individuals and corporates. The global Vitality membership base now exceeds five million lives.

Discovery is an authorised financial services provider. It is listed among South Africa’s Top 40 companies on the Johannesburg Securities Exchange and trades under the code “DSY”.

South African operations

Discovery Health

Launched in 1992, Discovery Health isSouth Africa’s largest healthcare funder and manager of medical schemes. It manages 14 medical schemes.
This includes the Discovery Health Medical Scheme, which has a 51% share in the open medical schemes market, making it South Africa’s largest open medical scheme.
The Discovery Health Medical Scheme covers more than 2.4 million lives.
The Scheme is the only one in South Africa to enjoy an AA+ rating for its claims paying ability, the highest possible credit rating from international rating agency Global Credit Ratings. The Scheme has maintained this rating for 12 consecutive years.
The Discovery Health Medical Scheme holds over R8.2 billion in reserves.
Discovery Health pioneered consumer-driven healthcare in South Africa with the introduction of innovations like the Medical Savings Account and its wellness programme, Vitality.
Discovery Health is continuously innovating new products and tools to enhance the quality of care members receive, including HealthID, an iPad-based application for doctors launched in 2012. The HealthID application is also available on Android mobile devices.
Discovery Health was voted the top medical aid brand in the Sunday Times Top Brands survey for both 2010 and 2011.
Discovery Health was voted the top healthcare product supplier at the 2010, 2011 and 2012 Financial Intermediaries Association of Southern Africa (FIA) Awards.
In 2012, the PricewaterhouseCoopers fifth biennial Strategic and Emerging Issues in South African Insurance survey rated Discovery Health’s insurance products as the leader in the industry.

Discovery Life

Discovery Life was launched in 2000 and is South Africa’s fastest growing major life assurer in the risk market, having captured 25% of the overall risk broker market.
It was the first South African insurer to separate risk from investment, leading significant change in the industry.
With 364 887 individual policies, the embedded value of its business is now more than R17 billion including Discovery Invest.
Discovery Life addresses the problem of underinsurance through its unique integrated operating model and through innovative product development.
Discovery Life was voted the top life assurer in the Sunday Times Top Brands survey for both 2010 and 2011.
Discovery Life was voted the top risk and life assurance supplier at the 2010 Financial Intermediaries’ Association of Southern Africa (FIA) Awards and the top long-term insurer: recurring savings at the 2011 and 2012 FIA Awards.
In 2012, the PricewaterhouseCoopers fifth biennial Strategic and Emerging Issues in South African Insurance survey rated Discovery Life’s life products as the leader in the industry.

Discovery Invest

Discovery Invest was launched in 2007 and declared its maiden profit in 2010.
Discovery Invest combines the breadth and skill of the asset management industry with the existing research and development capabilities of Discovery Life.
The company offers consumers a unique and comprehensive product range that addresses the current gaps in the market by offering greater protection against poor investment choices.
With 74 327 policies, Discovery Invest now has more than R26.6 billion in assets under management.
Through Discovery Invest’s LISP platform, clients have access to over 329 local and 65 offshore investment funds.
Discovery Invest is now the largest writer of endowment policies in South Africa with a 21% market share.
In 2011, Discovery Invest received the Financial Intermediaries Association of Southern Africa (FIA) award for best recurring premium business.

Discovery Insure

Discovery Insure was launched in May 2011 and now has 27 973 policyholders.
This pioneering product was created by leveraging the behavioural expertise developed in the Vitality programme with the latest telematics technology.
The unique Vitalitydrive programme encourages and rewards better driving behaviour and ensuring that vehicles are roadworthy.
At the heart of Vitalitydrive is the DQ-Track telematics device that measures and reports crucial aspects of driving behaviour.
Vitalitydrive provides up to 50% fuel rewards on clients’ monthly BP fuel spend.
Young adults between 18 and 25 can receive further discounts of up to 25% on their motor premiums.
Discovery Insure offers comprehensive vehicle, personal and household cover.

Discovery Vitality

Launched in October 1997, Vitality is Discovery’s science-based wellness programme that underpins each of the Discovery businesses and is an international brand in its own right.
It is the largest programme of its kind in the world, with a global membership base of over five million.
Vitality encourages healthy behaviours that reduce long-term healthcare costs by rewarding members for improving their health.
There are now more than 1.6 million Vitality members in South Africa.
Vitality is accredited by the Sports Science Institute of South Africa.
The Vitality value offering is enhanced by the DiscoveryCard, Discovery’s unique Visa credit card which gives members real cash back.
Launched in October 2004, the DiscoveryCard is South Africa’s largest non-bank new generation credit card in issue, with an 8.9% share of point-of-sales spend. There are now 231 302 primary cardholders.
The HealthyLiving benefit offers Vitality members up to 25% cash back on HealthyCare products at Clicks, HealthyGear at adidas and TotalSports stores, and HealthyFood items at Pick n Pay.
Vitality now has the ability to integrate into over 100 fitness tracking technologies.

International operations

United Kingdom

In the UK, Discovery has a 75% shareholding in a joint venture with Prudential plc. Through PruHealth and PruProtect, the company offers healthcare cover and protection products.

PruHealth

Launched in April 2004, PruHealth is the fourth largest Private Medical Insurer in the UK and the only one that rewards people for leading a healthy lifestyle.
PruHealth now covers 548 970 lives.
It offers consumer-directed products linked to the Vitality wellness programme.
In 2010, Discovery acquired Standard Life Healthcare, thereby leveraging the significant assets of both companies and resulting in greater scale for PruHealth.
PruHealth has won several awards for its product innovations.

PruProtect

PruProtect, which was launched in September 2007, markets consumer-engaged life assurance products in the UK market.
The company’s products integrate with those of PruHealth and Vitality to unlock added value and significant premium savings for clients.
The company has become a major player in the UK protection market. With 136 164 policies in force, it now covers 163 566 lives.
PruProtect has received industry recognition, including awards in four categories at the 2011 Defacto Awards. The company was also named Best Individual Protection Provider in 2011 by Professional Adviser, and walked off with the Innovation Award at the 2011 Protection Review.

United States

The Vitality Group

The Vitality Group was launched in 2007 and offers a stand-alone version of the Vitality programme to self-insured, large employer groups and to healthcare carriers.
Discovery holds a 75% share in The Vitality Group, 25% being held by Humana Inc.
The Vitality Group now covers 293 674 lives.
The Vitality Group has entered into a partnership with Wellness and Prevention, a subsidiary of Johnson&Johnson, the world’s premier consumer health company.
The Vitality Group recently announced a partnership with ADP, one of the world’s largest providers of payroll and employee benefits administration solutions.
In 2011, the group was awarded the C Everett Koop National Health Award for its work with Alcon Laboratories, a highly prestigious award recognising outstanding workplace health improvement programmes.

HumanaVitality

Launched in February 2011, HumanaVitality is a joint venture between Humana Inc and Discovery (through The Vitality Group) that makes Vitality available to Humana clients with commercial medical plans.
Discovery holds a 25% share in HumanaVitality.
Humana is the third largest US insurer, based on revenue. Humana has approximately 11.8 million medical members and 7.7 million specialty members.
HumanaVitality now has more than 1.5 million Vitality members.

China

Ping An Health

Ping An Health was launched in China in 2009, after Discovery acquired a 20% share in Ping An Health Insurance Co of China Ltd, a wholly-owned subsidiary of Ping An Insurance (Group) Company of China.
Ping An Insurance is China’s leading insurer and the second largest insurer in the world.
The joint venture will see Discovery’s product innovation and consumer-engaged model exported to a potential market of 83 million families.
Vitality was launched in China through Ping An Health in June 2012.

Singapore

AIA Vitality

AIA Vitality was launched in Singapore in July 2013, after a strategic joint venture between AIA Group Limited and Discovery Limited that aims to introduce Discovery’s successful wellness-based life insurance model to the Asia-Pacific region.
AIA Group Limited and its subsidiaries comprise the largest independent publicly listed pan-Asian life insurance group and holds leading positions across the majority of its markets. It has operations in 17 markets in Asia-Pacific and has operated in Singapore for more than 80 years.
AIA serves the holders of more than 25 million individual policies and over 13 million participating members of group insurance schemes.
The investment to be made in AIA Vitality by Discovery is expected to fall within Discovery’s strategic framework of less than 5% of pre-tax profits for new business development.