Chief executive officer, Discovery Holdings
Discovery services the healthcare funding and insurance markets in South Africa, the United Kingdom, United States and China.It is a pre-eminent developer of integrated financial services products and operates under the Discovery Health, Discovery Life, Discovery Invest, Discovery Insure, DiscoveryCard, Vitality, PruHealth, PruProtect and Ping An Health brand names. Making people healthier and enhancing and protecting their lives is Discovery’s core purpose.
Discovery offers health and financial products to nearly six million clients across four continents. Discovery’s products
are focused on some of the most fundamental areas of people’s lives – their health and wellness and the financial
security of their families. Discovery aims to add significant value and make a real difference in the lives of its clients
in these critical areas. This client-centric approach lies at the heart of the way Discovery does business and is the
common thread running through all its products.
All Discovery’s products and services have been created to deliver real value, protection and efficiency for its clients,
designed to meet clients’ complex needs in sustainable ways. This stimulates consumer demand for its products,
which in turn leads to rapid organic growth and superior returns for its shareholders.
As one of the leading South African businesses, Discovery has an important role to play in society. Using its scale and
position in various industries, as well as its unique skills set, expertise and resources, Discovery not only brings about
marked change in the lives of its clients, but can also play a positive role in the lives of all South Africans.
Discovery’s framework for sustainable development provides a measure for its contribution to and impact on society. Encompassing a range of issues that relate to its business, stakeholders and broader society, this framework supports its vision of creating shared value in society.
|•||A values-based culture of opportunity and innovation. Discovery aims to inspire its people and liberate their potential through a vibrant culture of innovation and performance, which leverages diversity and embraces transformation.|
|•||Strengthen the healthcare system and expand access to care. Discovery aims to use its resources and expertise to build a better healthcare system for all South Africans, with underserved communities being a high priority.|
|•||Improve the financial security of clients and protect them through innovative products and services. Through innovative product solutions Discovery offers its clients unique financial and lifestyle protection.|
|•||Use the science of behavioural economics to drive positive behaviour change. Discovery leverages its experience in incentivising behavioural change to develop innovative products which create value for clients and address critical societal problems.|
|•||Promote a stable society. Discovery aims to build a sustainable business to benefit its current and future clients and is committed to South Africa’s future growth.|
|•||Environmental responsibility. Discovery aims to decrease its environmental footprint and enhance its understanding of and responsiveness to environmental challenges.|
The year under review to 30 June 2012 was a pleasing one for Discovery, with solid performance across all businesses. The year saw growth in:
|•||new business of 24% to R9.3 billion;|
|•||operating profit of 21% to R3.4 billion;|
|•||normalised headline earnings of 14% to 2.3 billion; and|
|•||embedded value growth of 12% to R30.2 billion.|
The performance of Discovery Health and the Discovery Health Medical Scheme (“DHMS”) saw continued strong
growth, with 10% growth in new business, resulting in a 4.5% increase in total DHMS lives under management to
2.4 million lives.
Discovery Life’s performance is particularly pleasing given that it was achieved in a turbulent financial and economic
market with operating profit growing by 14% to R1 819 million; new business growing by 8% from R1 620 million
to R1 749 million; and the value of in-force business increasing significantly from R10 592 million to R12 358 million.
Discovery Invest’s strategy during the year was one of continued innovation to provide optimal investment solutions
for clients. From a financial results perspective the outcome was excellent, with normalised operating profit growing
by 50% to R151 million.
Discovery Insure had its first active trading year and performance was satisfactory. During this time, Discovery Insure
transacted R239 million of new business despite a fairly embryonic distribution footprint.
PruHealth and PruProtect (Discovery’s United Kingdom operations) continued to focus on quality, product innovation,
distribution development and customer value, translating into an excellent financial performance across the businesses.
At a combined level, new business from the UK exceeded R1 billion for the first time; earned premiums approached
the R5 billion level; normalised operating profit measured R300 million; while the membership base stabilised
at around 670 000 lives. PruHealth and PruProtect form the beachhead of Discovery’s international operations, and
focus will be applied to the further development of the integrated model in the coming periods. Discovery’s other
international operations continue to make progress in building scale and capability.
RMI Holdings included R579 million of Discovery’s earnings in its normalised earnings (2011: R165 million for the
For an indepth review of Discovery’s performance, RMI Holdings’ shareholders are referred to www.discovery.co.za.