The group said that Discovery Bank\u2019s performance exceeded expectations, “with excellent performance across all metrics”. In particular, Discovery said that client acquisition, revenue per client and the performance of the advances book exceeded expectations, resulting in the bank\u2019s operating loss reducing faster than planned.<\/p>\n
“The spend on Discovery Bank amounted to 9% of group operating profit, compared with 11% in the prior period, it said.<\/p>\n
Discovery Life performed ‘robustly’ with ‘strong positive experience variances’, particularly lapse experience, while capital and liquidity positions remain robust, the group said.<\/p>\n
The earnings growth, however, must be seen in the context of Discovery Life having paid out cumulatively more than R6 billion Covid-19 claims, gross of reinsurance, over the prior and the current reporting periods, with returns on the reduced asset base impacting earnings.<\/p>\n
“Provisions were sufficient for claims paid in the reporting period and the Group believes that remaining provisions are sufficient to withstand a potential fifth wave. This is supported by high levels of vaccination amongst its clients and high levels of natural immunity in SA, borne out by the significant reduction in case fatality rates in the fourth Omicron wave.”<\/p>\n
The group said that its VitalityHealth division delivered a strong performance reflecting the cumulative effect of sustained membership growth driven by new business and continued low lapse rates. The incidence of claims has returned to pre-Covid-19 levels although the severity and cost of claims were still less than expected, it said.<\/p>\n
Discovery Insure, the group said, had a difficult period, characterised by an increased loss ratio driven by adverse weather events combined with motor parts inflation dramatically exceeding CPI.<\/p>\n
Discovery said it spent 8% of group operating profit on new initiatives – excluding Discovery Bank), compared with 7% in the prior period.<\/p>\n
“Half of this spend relates to Vitality Group with a notable increase in spend on globalising Discovery\u2019s Vitality and Health capabilities via the Vitality Group. Amplify Health, a health insuretech JV with AIA in Asia, announced on 15 February 2022, was an important manifestation of this.”<\/p>\n
The group intends to report its half-year 2022 results on 24 February 2022.<\/p>\n
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