Discovery Group’s normalised headline earnings increased 11% to R3.32 billion and new business annual premium income (API) was up 28% to R14.2bn, while the bank reached monthly break-even ahead of schedule.
“In an environment of macroeconomic complexities, Discovery delivered a strong operating performance underpinned by our investment in future growth platforms as well as adhering to financial discipline,” chief executive Adrian Gore said in a statement.
An interim dividend of 65 cents (110c – 2023 financial year end) was declared. In South Africa, the Discovery Health, Discovery Bank, Discovery Life, Discovery Invest and Discovery Insure businesses’ normalised operating profit increased 9% to R4.36bn, while new business increased 29% to R11.1bn.
In the UK, the Vitality Health and Vitality Life lifted normalised operating profit 2% to £34.7 million, or by 13% to R812 million.
Vitality Global, comprising Vitality Network, Ping An Health Insurance in China, and Vitality Health International, increased operating profits by 55% to $24.4m, or by 71% to R455m in rand terms.
Gore said they focused on growth, cash generation and capital resilience during the period, while ensuring platforms were geared for growth, and Discovery Bank and Vitality Global were scaled further.
“Growth in core businesses was robust, and focused investment in Discovery Bank and Vitality Global manifested in exceptional performance, with these being positioned as strong platforms,” he said.
The banking business achieved its target of monthly operational break-even before acquisition costs during the period, ahead of plan. For the six months Discovery Bank’s operating loss, before new business acquisition costs, improved by 40% and the bank had more than 825 000 clients as of December 2023.
“The bank is growing rapidly through the acquisition of quality clients on a scalable platform and its exceptional customer engagement position is set to play a central role in advancing the group’s South African business through integrated ecosystems,” said Gore.
Discovery Health saw new business increase 52%, including the take-on of Sasolmed closed medical scheme. Discovery Individual Life delivered strong earnings growth.
Group Life declined from the prior year’s exceptional performance. Discovery Invest’s performance was robust with revenues and profit benefiting from higher market levels. Discovery Insure profit recovery was constrained by two severe weather events.
In the UK, earned premiums from Vitality Health and Vitality Life increased 11% year-on-year to £536.8m, and total lives insured increased by 5% to 1.83 million. New business API increased 6% to £88m. Vitality Life was now fully self-funding.
In Vitality Global, Discovery’s partnership with leading insurer Ping An had seen Ping An Health Insurance emerge as a specialist health insurer of scale in China, delivering high-quality operating metrics and cash generation, with a strong balance sheet.
Gore was optimistic about the global adoption of the Vitality shared-value Insurance model with leading insurance partners.
“Growth in the Vitality Network demonstrates the emerging operational leverage within the business,,” he said,
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