Top South African insurer wants to take over the United States

Discovery has plans to significantly expand its presence in the American health insurance market through its Vitality AI partnership with Google. 

The company already licenses its Vitality data set and intellectual property (IP) to health insurers in the United States, as it does elsewhere. 

Vitality has extensive partnerships with Asian-Pacific giant AIA, Japan’s Sumitomo Life, and Ping An in China.

The Ping An partnership is unique in that Discovery has an equity stake in the Chinese giant itself, which has proven to be lucrative. 

Discovery CEO Adrian Gore told Daily Investor that the two keys to it achieving its 2029 targets are the continued growth of its bank and the expansion of Vitality Global. 

Discovery Bank has exceeded all expectations and is now profitable, with it on track to reach R3 billion in annual profit by 2029. 

The other side of the equation is proving more challenging as it requires partnerships and business dealings in new regulatory jurisdictions. In particular, the United States has proven hard to crack. 

Vitality has had a long-standing partnership with John Hancock in this market, but Gore says this presence is of suboptimal scale. 

“We have been there for a long time with a suboptimal scale business with Vitality, dealing with health plans and employers,” Gore said. 

Now, Discovery wants to significantly increase Vitality’s presence in the American market and make it into a $100 million revenue business in the next few years. 

“This is a much bigger step, but it is a very measured approach. We are not betting the house here. This is a low-capital, high-IP business,” Gore explained. 

“The market is so big that if we can get a foothold, it makes a massive difference. I think given the scale of the market and our model, we are very excited about it.” 

“I don’t think it’s a do-or-die situation, but there is a lot of activity in the market, and we must close it down. This part of the business should get to $80 million to $100 million of profit by 2029.”

Vitality AI leads the charge

Leading the charge in this regard is Vitality AI and its partnership with Google, which will make it easier for American companies to leverage the business’ unique IP. 

“What we have now in the US and the AI partnership with Google is in the right form. We have made important steps in the American healthcare space,” Gore said. 

Vitality has snapped up three businesses in the United States to expand its capabilities and deepen its market penetration. 

It has bought WellSpark, Ramp Health, and Icario to augment its existing offering through specialisations in health coaching, clinical reach, and government plan expertise. 

Icario was a particularly important acquisition as it opens the door for Vitality to gain exposure to the US government’s health insurance plans. 

It also adds 11 million lives to Vitality’s American business, greatly enhancing its scale and premium base. 

On 22 September, Gore revealed the Vitality AI partnership with Google in the United States during a presentation at the tech giant’s New York offices. 

Gore explained that the partnership is about applying AI to help people stay healthier for longer, which is a major problem in ageing populations. 

“Vitality really is one of the few scalable solutions we have to a demographic challenge. Governments have massive debt and no fiscal room,” he said. 

“You have an ageing population with a declining number of working-age people, and the cost of healthcare continues rising.”

“In this situation, you find that the burden on taxpayers becomes untenable unless we find some way to bring healthcare costs down.” 

“The only way you can do that is to compress morbidity. You have to reduce sickness, and that is what we try to do every day at Discovery.”

Vitality AI’s partnership with Google will enable companies to deliver personalised health pathways at scale. 

“This launch marks a significant step in our strategy – and business model – as we strengthen Vitality and expand its reach in the US to work with health plans and other partners,” Gore said.