Adrian Gore, Discovery group CEO.
Financial services firm Discovery is leveraging artificial intelligence (AI) to drive efficiency as well as transform risk and engagement.
This emerged when the JSE-listed company today presented its annual financial results for the year ended 30 June.
Headline earnings and normalised headline earnings both increased by 30%, to R9 625 million and R9 781 million, respectively, resulting in the normalised return on equity increasing to 15.4%, from 13.5% in the previous year.
Growth was seen in normalised profit from operations in both composites – Discovery South Africa delivered 22% growth and Vitality generated 70%.
“The strong performance of Discovery South Africa over the year highlights the compelling contribution from each of our businesses,” says Adrian Gore, group chief executive.
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“And in Vitality, the performance reflects the competitive dynamics of the Vitality Shared-value Insurance model, with excellent progress made in restructuring the global operations into a single focused business over the past nine months. With the positive contributions from each composite, we have seen an excellent start to the current growth phase.
“In the year under review, economic growth remained below potential in many regions where Discovery operates, although interest rate reductions provided a better backdrop for investment markets. Risks remain elevated; however, the acceleration of technological and demographic trends underpin the relevance of the Vitality Shared-value Insurance model and unique data. This positions Discovery uniquely for continued growth.”
On leveraging AI, Gore says: “We are able to deliver measurable improvements in health outcomes, service delivery and profitability through our unique model and dataset.
“In Discovery Bank, we recently introduced Discovery AI, and Vitality AI was launched as Personal Health Pathways in Discovery South Africa. These capabilities allow for a more precise understanding of health risks and hyper-personalised product experiences to encourage healthier behaviour. So far, both Discovery AI and Vitality AI have driven excellent engagement.”
The insurer reveals that Discovery Bank reached monthly break-even at the end of first half of the year and generated its first profitable period during the second half, ahead of plan.
“The group is well-positioned for sustained growth from our investment in our model and two composites, Discovery South Africa and Vitality,” says Gore.
“In Discovery South Africa, Discovery Bank continued to expand its innovative product solutions and quality customer base, with more than two-thirds of new customers being new to the group, making it a key strategic platform to drive further growth. Overall, the strong performance of the focused composites makes us confident that we can achieve our established five-year ambition for growth in profit from operations,” he adds.
The group has declared its final ordinary dividend for the period at 201c per share, representing an annual cover ratio of five times.
