Discovery has a secret weapon

Discovery plans to expand the rollout of its new artificial intelligence tool – already in use in South Africa and the UK – to clients across its Vitality Network, including in Europe and North America, as it seeks to double its operating income by 2029.

The company, which runs South Africa’s biggest health-insurance administrator, will also use insights from the tool to guide product development, CEO Adrian Gore said in an interview with Bloomberg TV.

The technology has allowed Discovery to gain a more precise understanding of health risks and deliver highly personalised product experiences aimed at encouraging healthier behaviour, he said on Thursday.

“Just from the modelling of the data, we have deep convictions about its potential,” he said.

The financial services company also plans to grow its existing investments and build partnerships to lift its return on equity to 15% to 20% by 2029 from an average of 13% over the past eight years. 

“We think we could achieve that,” by 2029, Gore said. 

The CEO spoke after the company posted record annual profit. Normalised headline earnings increased to R9.78 billion from R7.51 billion a year earlier, the Johannesburg-based company said in a statement.

Operating income advanced 29% to R15.2 billion, supported by an improved claims ratio. 

The banking business slashed its operating losses, and marked its first profitable period during the second half of the financial year, after it added richer clients.

Customer numbers increased 30% to 1.2 million by June, with client deposits climbing 39% to 9.2 billion rand.

The insurer’s business in South Africa posted a 22% increase in profits thanks to a 5% jump in new business volumes, and as client numbers swelled to 6.4 million.

Gore expects the unit to sustain momentum as South Africa’s economy benefits from a raft of reforms introduced over the last few years to reduce power cuts and improve the efficiency of the country’s logistics systems. 

“I think we feel quite confident about our ability to grow in the home market.”