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Press release -

Discovery’s financial results reflect a business built on innovation, quality and value

Wednesday, 5 September 2012 - Discovery Chief Executive Officer Adrian Gore today announced the company’s annual financial results to the investor community and media.  Discovery posted a strong financial performance in the past 12 months, positioning the company firmly as a superior insurance group that measures competitively against its peers in the global financial services market.  Discovery’s leadership position in the South African market is especially evident from its top peer ranking in the PricewaterhouseCoopers fifth biennial Strategic and Emerging Issues in South African Insurance survey.

Gore believes  Discovery’s unique and repeatable business model is the key to the company’s positive results in difficult economic circumstances: “Discovery’s business model is built on an explicit methodology to utilise powerful financial and behavioural structures that meet people’s complex needs in sustainable ways. At the same time we aim to deliver superior returns for shareholders that reflect the innovation margin.”

Discovery’s approach of achieving growth by building businesses from scratch or partnering with credible and established businesses in other markets through the use of Discovery’s IPhas enabled the company to grow on a relatively capital-light basis.

Highlights for the period include:

  • Strong earnings growth of 24% from Discovery’s established businesses – Discovery Health, Discovery Life, Vitality, DiscoveryCard, PruHealth, PruProtect and Discovery Invest
  • Strong new business growth across all businesses of 24% to R9.3 billion
  • Normalised operating profit increased to R3.4 billion
  • Normalised headline earnings increased 14% to R2 316 million
  • Embedded value up 12% to R30.2 billion
  • Return on capital of 22% over the period.

Looking at the individual businesses, all made good progress against set objectives.

Discovery Health’s performance was exceptional when viewed against the key metrics of new business growth (10%), lowest-in-industry lapse rate at 3.9%, high reserve levels and excellent credit rating – all resulting in normalised operating profit up 10% to R1 499 million. Importantly, the membership of Discovery Health continued to be stable with 98% of members choosing to remain on the same plan or upgrading their plan. Gore said, “Our vision is to build a world-leading health insurance capability that enables us to provide best-in-industry products and services to our clients. To achieve this, Discovery Health’s role is to balance the competing needs and objectives of maximising access for members and enhancing the quality of care, while also lowering the cost of healthcare. I believe we are delivering on these objectives as is evident by the fact that Discovery Health options are 10 to 30% cheaper than the market average with richer benefits,”

Discovery Life’s performance was in line with expectations, especially in light of the turbulent financial and economic market. Normalised operating profit grew by 14% with an 8% increase in new business API from R1 620 million to R1 749 million. Gore said, “During the year we focused on improving quality across every aspect of the business. We did considerable work to further solidify our distribution model as well as refining the integration model with Vitality to improve the mortality and morbidity experience for Discovery Life.”  Other highlights for the period include the launch of a range of unique benefits such as the CoverBooster and BenefitBooster that give consumers additional life benefits at no extra cost, based on their engagement with Vitality.

Discovery Invest’s strategy is to provide optimal investment solutions to investors through continuous innovation. Given the uncertainty and volatility in world markets, the ability to provide protection for clients’ savings and retirement savings, is critical. Discovery Invest’s performance was excellent in this market with normalized operating profit growing by 50% to R151 million – a testament of its innovation capability and value proposition.

Discovery Insure had its first trading year and is now gaining traction with daily new business now approaching 9% of the personal lines market. The company’s strategic vision is to encourage better driving and safer roads by leveraging the behavioural economics learnings from Vitality in a comprehensive insurance offering. Gore says the methodology of measuring, incentivising and guiding policyholders to become better drivers has proven successful, “With Vitalitydrive we are now seeing a strong inverse correlation between driving performance as measured by the DQ-Track algorithm and the frequency of motor vehicle accidents. With regards to the impact on driver behaviour, we’ve seen a 17% improvement in driver scores within six months of joining Discovery Insure. BP transactions now account for 77% of Vitalitydrive clients’ fuel spend, with over 311 100 fuel transaction during the period.”

Vitality remains the key differentiator for Discovery with a number of published research studies proving the programme’s effectiveness in changing complex health behaviours. Vitality creates long-term value for Discovery across all businesses in terms of the mortality and morbidity experience and for clients, in terms of their health and quality of life. During the year, Discovery saw record-levels of engagement in the programme, proof of its power to change behaviour. 

The UK businesses (PruHealth and PruProtect) posted excellent financial results with combined new business exceeding R1 billion for the first time, premium income at R5 billion and normalised operating profit of R300 million. Gore said, “We are very pleased with our progress in the UK. We are growing a quality integrated business with PruHealth and PruProtect and our focus during the last year on customer value, innovation, distribution development  and quality have delivered the results we were aiming for,”

In the USA, proposed healthcare reform is creating uncertainty in the health insurance market. Despite this, there is strong recognition from parties on both sides of the political spectrum that addressing poor lifestyle choices is critical. In light of this, The Vitality Group continues to invest in methods and tools to drive engagement and further develop the science of wellness. A number of innovations are currently being developed by TVG which Gore said positioned TVG strongly to capitalise on the opportunities presented by the US market.

In China, Discovery’s joint venture with Ping An Health is making good progress in building the scale and capability necessary to shape the commercial health insurance market. At the end of June 2012, Ping An Health was ranked first in the group high-end medical insurance market in total premium income. “We reached a major milestone with the deployment of Vitality in the Chinese insurance market this year. Vitality has the potential to play a transformational role in encouraging individuals to buy protection insurance,” Gore concluded.



Discovery information

Discovery is an authorised financial services provider.

Discovery operates in the healthcare cover market in South Africa, the United Kingdom and China; the life assurance market in South Africa and the United Kingdom; as well as the long-term savings and investment market, and short-term insurance market in South Africa.

 Vitality, Discovery’s wellness programme, is the world’s largest scientific, incentive-based wellness solution. It provides individual and corporate wellness initiatives in South Africa, the United Kingdom, the United States of America and China. The global Vitality membership base now exceeds 3.4 million lives.

Discovery’s core purpose is to make people healthier, and to enhance and protect their lives through financial products that clients need and want.

 South African operations

 Discovery Health

 Launched in 1992, Discovery Health is South 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 50% share in the open medical schemes market, making it South Africa’s largest open medical scheme.
  • Discovery Health covers more than 2.6 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 Discovery Health Medical Scheme holds over R7.4 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.
  • 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 355 534 individual policies, the value of its business is now more than R12.4 billion.
  • 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 October 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 65 573 policies, Discovery Invest now has more than R25 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 27% 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 16 246 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 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.
  • 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 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.
  • Vitality value offering is enhanced by the DiscoveryCard, Discovery’s unique Visa credit card which gives members real cash back.
  • Launched in 2004, the DiscoveryCard is the largest non-bank card in issue, with an 8.9% share of point-of-sales spend. There are now 231 302 primary cardholders.


 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.   


Launched in 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 554 730 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, which was launched in 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 109 929 policies in force, it now covers 132 616 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.


 Launched in 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.


 Ping An Health


  • Ping An Health was launched in China in 2010, 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 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 deployed in China through Ping An Health in May 2012. 


Press contacts

Felicity Hudson

Felicity Hudson

Press contact Head of Reputation Management Discovery Group 0115294514

Nthabiseng Chapeshamano

Press contact Senior Reputation Manager Healthcare & Sustainability

Munene Khoza

Press contact Senior Reputation Manager Vitality & Wellness

Zeenat Moorad

Press contact Senior Reputation Manager Banking & investments

Shanti Aboobaker

Press contact Reputation Manager Long and short term insurance

Gugu Yika

Press contact Reputation Management Consultant Vitality & Sponsorships 0115298083