Discovery, the private medical aid and financial services group, said yesterday normalised headline earnings were expected to increase between 12% and 17% for the year to June 30.
Discovery, which expects to report its annual results on September 19, said in a trading statement headline earnings were likely to increase between 4% and 9%. New business increased by 18%.
Normalised profit from operations was expected to have increased between 15% and 20%. The share price rose 4.26% to R154.78 by yesterday afternoon after the release of the trading statement.
The group said its Discovery SA segment performed strongly, with a “compelling contribution” from each business in the composite.
Discovery Bank exceeded their management expectations. “The acquisition of quality clients continued to accelerate, resulting in strong revenue growth,” the group said.
Discovery Life delivered “robust earnings”, despite the result for Group Life being elevated in the prior year.
Discovery Health generated solid earnings growth. Discovery Invest delivered strong profit growth due to an increase in the value of assets under management.
Discovery Insure delivered a good recovery in the second half of the reporting year, as prior period management actions took effect.
Vitality UK achieved strong growth in customers, new business and earned premiums. Normalised operating profit was impacted by two issues: claims experience in VitalityHealth and a basis strengthening for the back book under VitalityLife.
VitalityHealth's membership in the UK reached 1 million, having grown strongly from the increased demand for private medical insurance given the backlogs experienced by the National Health Service.
VitalityHealth increased prices in response to the higher claims, in line with the market, with little impact on observed lapse rates. Post the reporting period, claim levels were in line with actuarial expectation.
VitalityLife's underlying performance was “robust” with new business value generation improving in the second half.
Vitality Global performed well. Ping An Health Insurance delivered an “excellent operating result” and strong cash generation.
Ping An Health Insurance commenced the payment of dividends at a payout ratio of 30% of 2023 calendar year distributable profits.
BUSINESS REPORT