Discovery Group has reported a strong set of results for the period ended December 31, with both its South African and global businesses delivering growth ahead of its five-year targets.
Normalised operating profit increased by 24% to R8.8-billion, underlining what it described as a resilient performance despite global economic pressures.
Headline earnings increased by 29% to R5.6-billion, while normalised headline earnings climbed 27% to R5.745-billion.
Defying geopolitical tensions
Discovery said it delivered a strong performance in an environment characterised by increased complexity as a result of geopolitical and trade tensions.
Although economic growth remained below potential in many regions, easing interest rates helped create a more supportive backdrop for investment markets.
In South Africa, improved cooperation between the public and private sectors and better terms of trade contributed to stronger capital markets and lower bond yields.
Discovery South Africa delivered 19% growth in normalised profit from operations, with new business rising 10%. The division now serves 6.5-million customers, up 7% from the prior period.
Client base grows
Discovery Bank continued to expand rapidly, adding around 1 500 new clients per day on average.
Discovery Health recorded solid new business growth and maintained earnings momentum, despite absorbing a once-off administration concession to members.
Discovery Life increased operating profit strongly, with new business up 16% on an embedded value basis, although total annual premium income declined slightly due to lower inflation-linked increases.
Discovery Invest benefited from strong capital markets and positive inflows, though earnings were affected by an asset-liability matching loss linked to a sharp fall in bond yields. Excluding this and a prior-period gain, earnings increased by 21%.
Discovery Insure also delivered improved results, lifting its operating margin through disciplined pricing and tighter claims management while maintaining quality new business growth.
Vitality shines
The global composite, Vitality, recorded 41% growth in normalised operating profit and a 16% rise in new business.
The business now covers 11.2-million lives outside China, up 15%, including more than
2-million customers in the UK. In China, covered lives increased 17% to more than
34-million.
VitalityHealth improved margins through pricing and claims management, while VitalityLife delivered strong new business growth. Ping An Health Insurance produced a strong operating result, helped by exceptional investment returns, although recent distribution changes are expected to affect new business volumes in the short term.
Discovery said its continued investment in artificial intelligence and the Vitality Shared-value model is positioning it for further growth.
It has also launched a new partnership with Google, which is expected to boost engagement across Vitality programmes globally.
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