One South African company fixed over 300,000 potholes in Joburg

Discovery, through its Pothole Patrol partnership with the City of Johannesburg and Avis, has repaired 312,338 potholes in South Africa’s largest city. 

Launched in May 2021, the project is repairing around 75,000 potholes a year and has resurfaced over 40 kilometres of road in Johannesburg. 

CEO Adrian Gore pointed to this as an example of business actively participating in the improvement of service delivery and the livelihood of citizens. 

While the repair of potholes benefits Discovery’s short-term insurance through reduced vehicle claims, it also benefits the lives of ordinary individuals. 

Gore said the initiative has also benefited Discovery’s competitors, who receive the same benefit from a reduction in damages due to potholes. 

In his recent analyst presentation for the 2025 financial year, Gore explained that the savings for Discovery Insure alone are enough to justify the initiative. 

Crucially for Gore, the Pothole Patrol is also a physical demonstration of Discovery’s shared-value model, which underpins its entire business. 

While the programme has had significant success, it is still a drop in the ocean, with it being estimated that South Africa has between 50,000 and 100,000 potholes to attend to at any given point in time. 

Johannesburg’s roads are particularly notorious for their poor condition, as the city’s summer thunderstorms result in substantial water damage to infrastructure. 

This is exacerbated by the lack of maintenance of road infrastructure and the increasing volume of heavy-load traffic as Transnet’s collapse forces more trucks onto the road. 

Potholes erode further the longer the area is exposed to weather elements, high traffic volumes, and poor maintenance. As a result, they become more damaging for road users. 

This increased frequency and severity of damages has impacted short-term insurers financially, resulting in strong financial motivation to repair potholes. 

Potholes are estimated to cost South Africa R650 million through vehicle damage alone, amounting to significant claims for insurers to pay out. 

Discovery Insure takes off

Launched 15 years ago, Discovery Insure has grown strongly in recent years to become a substantial contributor to the company’s earnings. 

It is the primary beneficiary of the Pothole Patrol projects as it houses the group’s short-term insurance business. 

In the past financial year, decisions were made to improve the quality of its book and enhance capital efficiency, which have borne fruit. 

Its loss ratio almost halved year-on-year due to management actions to improve underwriting, pricing, claims initiatives, and stricter upfront selection. 

This increases the persistence in Discovery’s client base, resulting in decreased lapses and claims. All of this amounts to improved profitability. 

However, the business unit benefited immensely from an unexpected improvement in weather-related claims due to less severe weather events over the past year. 

The company said Discovery Insure sustained its positive trajectory over the year, delivering an operating profit of R739 million. 

The operating margin of 11.9% reflects disciplined execution and effective cost management, with lower new business volumes influenced by the deliberate pricing strategies and evolving market dynamics. 

Gore said performance highlights the success of targeted management actions, particularly in improving non-weather-related claims experience, which showed further gains in the second half of the financial year.

In addition, compared to severe weather in the prior year, benign weather conditions in the current year resulted in the loss ratio being 2.5% lower than expected.  

The unit remains very selective in its new business growth, with gross new business declining by 2% to R1.36 billion. 

This is part of its efforts to improve the quality of its book, with it focusing on attracting lower-risk clients at the expense of absolute growth. 

As a result, the share of clients deemed superior risk has risen from below 85% of Discovery Insure’s book to over 90% since 2019. 

In the long run, this should result in an improved financial performance. Discovery Insure’s improvements can be seen in the graphs below.