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Discovery Group

Discovery Logo
Adrian Gore
Chief executive officer
  Adrian Gore
       

Founded in 1992, a compelling core purpose has guided Discovery’s rapid growth – to make people healthier and to enhance and protect their lives. Discovery has built a sustainable business that will not only prosper over the long-term, but will benefit all its stakeholders.

With its headquarters in Johannesburg, Discovery has expanded its operations globally and currently serves over seven million clients across South Africa, the United Kingdom, the United States, China and Singapore. It operates under the Discovery Health, Discovery Life, Discovery Insure, Discovery Invest, DiscoveryCard, Vitality, PruHealth, PruProtect, Ping An and AIA Vitality brand names.

Discovery’s ambition is to be the best insurance organisation in the world. It wants to be known for its excellence, financial strength and innovation. In addition, it strives to be a powerful force for social good – whether through the way it does business, the products and services it delivers or through the impact its business has in the broader society. To achieve its ambition, Discovery uses its unique business model to make a tangible difference in people’s lives. In health insurance, integration incentivises healthier behaviour and reduces healthcare costs over the long-term and in life insurance, it creates the ability to offer clients innovative products, introduces dynamic rating factors that reduce costs for consumers and improves actuarial dynamics. By using these powerful financial and behavioural structures that meet people’s needs in sustainable ways, it is able to provide superior returns for shareholders.

Discovery’s framework for sustainable development supports this ambition. This framework focuses on six areas:

  • A values-based culture of opportunity and innovation. Discovery seeks to continually grow a highperformance, values-based culture of opportunity where diversity is embraced, innovation thrives, personal wellbeing is valued and individuals are inspired to achieve their potential.
  • Strengthen the healthcare system and expand access to care. Discovery aims to work with government in support of universal healthcare coverage and with healthcare providers to develop the capacity to deliver it.
  • Improve the financial security of clients and protect them through innovative products and services. Discovery strives to increase the financial security of its clients and in so doing, enhance the sustainable development of its society and economy.
  • Use the science of behavioural economics to drive positive behaviour change. Discovery aims to leverage its experience in incentivising to bring about positive behavioural change amongst its employees, members, its supply chain and partners, as well as broader society.
  • Promote a thriving society. Discovery aims to ensure accountable, transparent and ethical business practices within its value chain and broader stakeholder network and to encourage a culture of entrepreneurship.
  • Environmental responsibility. Discovery aims to achieve a meaningful decrease in its environmental footprint and enhance its understanding and responsiveness to climate change and other pressing environmental challenges.

The Discovery Fund provides ongoing financial support to 34 community healthcare organisations and projects across South Africa, with many of these organisations and projects situated in remote and rural areas. The Discovery Foundation is investing R150 million to train 300 healthcare specialists in South Africa. The year under review to 30 June 2013 was a pleasing one for Discovery, with solid performance across the group. The year saw growth in:

  • new business by 15% to R10.8 billion;
  • normalised profit before tax from operations by 18% to R4.1 billion;
  • normalised headline earnings by 20% to R2.8 billion; and
  • embedded value by 18% to R35.7 billion.

The year under review saw significant investment (some 12% of earnings) in new business initiatives, a substantial portion of which was in Discovery Insure, which showed pleasing growth and in AIA Vitality, the strategic pan Asian joint venture launched in Singapore.

The South African operations demonstrated strong performance and generally ended the year ahead of expectation.

  • The performance of Discovery Health and the Discovery Health Medical Scheme saw continued strong growth, with 13% growth in new business to R4.8 billion, while lives under management grew to 2.76 million.
  • Discovery Life’s performance is particularly pleasing with operating profit increasing by 16% to R2.1 billion.
  • Discovery Invest’s outcome was excellent, with operating profit growing by 46% to R221 million.
  • Discovery Insure increased new business by 53% to R366 million.

The performance from PruHealth and PruProtect (Discovery’s United Kingdom operations) was exceptional, with new business growing by 48% to R1.6 billion, resulting in a 57% profit growth to R472 million.

RMI Holdings included R699 million of Discovery’s earnings in its normalised earnings (2012: R579 million).

For an in-depth review of Discovery’s performance, RMI Holdings’ shareholders are referred to www.discovery.co.za.