Incentivise positive change

Incentivising behaviours that promote better health, safer driving and financial wellbeing

Related material matters and sustainable development goals

Material matters:
1. Deliver on our core purpose
5. Leverage our capabilities to support resilient ecosystems

Sustainable Development Goals:
9. Industry, innovation and infrastructure

Deepening the social value of our products

Our core markets of South Africa and the United Kingdom have led the way in deepening social value. In South Africa, we are using our unique approach to healthcare insurance and wellness to provide products that protect and enhance the lives of people, helping to make healthcare accessible to a broader market and alleviating some of the burden on public healthcare systems. We are extending this approach in life assurance, short-term insurance, savings and investments, and banking.

Discovery Health’s strategic objective is to become the lowest cost administrator, with ongoing investment in technologies to optimise operational efficiency and service levels. This not only supports better business and member satisfaction, but lowers healthcare costs.

8.8 member satisfaction score (out of 10) in Discovery Health Medical Scheme

In Discovery Health Medical Scheme, members pay an average of 16.7% less than they would at the next ten largest open schemes

Discovery Health offers the broadest product range, with premiums lower than the cheapest competitor on a benefit-adjusted basis

The weighted average contribution increase for Discovery in 2020 was 9.5%

Efforts to reduce fraud and waste in the healthcare system increases value for members and supports efficiencies and trust in the healthcare system.

Read more in Preventing corruption, fraud and waste.

By strengthening and expanding access to quality private healthcare, Discovery Health reduces the burden on the public healthcare system.

Discovery KeyCare is an affordable medical aid option that is combined with KeyFit to give access to wellness facilities, incentives and tools to encourage healthier behaviour

Discovery Primary Care is a unique healthcare product that enables employers to provide employees and their families with affordable quality private healthcare and wellness management at a cost that is acceptable to employees at all income levels.

Discovery Health supports a number of interventions to improve the quality of care for its members by implementing and expanding value-based contracting initiatives with doctors and other service providers including:

DiabetesCare, CADCare and KidneyCare programmes, which ensure subscribed members get high quality coordinated healthcare and improved outcomes

Discovery HealthID shares important information with healthcare professionals selected by patients to give a more complete view of their health history and test results. This improves patient care and reduces the likelihood of serious medical errors and duplicate or unnecessary pathology tests. In addition, HealthID also reduces the administrative burden for doctors

Discovery’s Patient Satisfaction Survey rates the quality of care received by participating medical scheme members at hospitals and incentivises further improvement on the part of hospitals for the benefit of all patients, including Discovery members.

We drive a savings culture and reward good financial choices through Discovery Bank.

Discovery data shows that positive behavioural change is seen just two months after joining Discovery Bank

Credit arears rate 5.4 times less than the market*

R3.7 billion retail deposits (with average deposits being 5 times higher than the market).

* TransUnion statistics

Our Vitality1 platform is a globally unified systems architecture that markets can access, allowing rapid and economical deployment to our partners. Through Vitality1, we are increasing the positive behavioural impacts of the Vitality programme globally by:

Enabling more frequent engagement between our insurer partners and their customers

Leveraging increasing quantities of data gathered from insurers across different countries to improve and develop new models

Providing our partners with access to increasingly accurate insights on what behaviours and incentives achieve the best outcomes and greater social impact.

Applying behavioural economics

Discovery Limited is a South African-founded financial services organisation that operates in the healthcare, life assurance, short-term insurance, savings and investments, banking, and wellness markets.

 

The Challenge:

4 lifestyle behaviours and 4 chronic conditions contribute to 60% of deaths worldwide

The Behaviours
  • Poor diet
  • Physical inactivity
  • Tobacco use
  • Excess alcohol intake

The Conditions
  • Various cancers
  • Chronic lung disease
  • Diabetes
  • Cardiovascular disease

Sources

World Health Organisation and its Global Burden of Disease assessment

Discovery’s response
Make people healthier and live longer

Activated through our Shared-value Insurance model

Along with our partners, we use the Vitality Shared-value Insurance model to change the way consumers worldwide experience insurance

How we respond

As a catalyst for behaviour change, we incentivise and reward our members to Improve their health by providing better value and improved price and benefits.

… which sustains our business through:

Healthy behaviours supporting:

  • Lower claims
  • More profitable and sustainable business
  • Positive selection and lower lapses

… and has a positive impact on society as:

Savings and healthier behaviours support:

  • A healthier society
  • Improved productivity
  • Reduced healthcare burden

… leading to a virtuous cycle of shared value.

The Challenge:

5 driving behaviours and 3 driving conditions account for 60% of fatal accidents

The Behaviours
  • Excessive drinking
  • Cellphone use while driving
  • Excessive speeding
  • Harsh braking
  • Lack of vehicle care

The Conditions
  • Distracted driving
  • Loss of vehicle control
  • Aggressive driving

Sources

Road Traffic Management Corporation and U.S. Department of Transportation

Discovery’s response
Make people better drivers and have fewer road accidents

Activated through our Shared-value Insurance model

Along with our partners, we use the Vitality Shared-value Insurance model to change the way consumers worldwide experience insurance

How we do this

As a catalyst for behaviour change, we incentivise and reward our members to improve their driving by providing better value and improved price and benefits.

Sustaining our business

This supports Discovery, our partners and networks through improved driving behaviours supporting:

  • Less vehicle accidents
  • Lower claims
  • Higher margins
  • Positive selection and lower lapses

Sustaining society

Savings and healthier behaviours have a positive societal impact through:

  • Nation of better drivers
  • Less road deaths and injuries
  • Less Road Accident Fund claims

The Challenge:

3 investment behaviours and 3 conditions result in 90% of people having inadequate retirement funding

The Behaviours
  • Insufficient contribution levels
  • Inadequate investment terms
  • Irresponsible withdrawals in retirement

The Conditions
  • Insufficient retirement income
  • Intergenerational debt
  • Dependence on state resources

Sources

National Treasury

Discovery’s response
Make people better prepared for retirement

Activated through our Shared-value Insurance model

Along with our partners, we use the Vitality Shared-value Insurance model to change the way consumers worldwide experience insurance

How we do this

As a catalyst for behaviour change, we incentivise and reward our members to save for longer, practice responsible financial behaviour and a live a healthy lifestyle.

Sustaining our business

This supports Discovery, our partners and networks through better financial behaviours supporting:

  • Longer investment
  • Better persistency
  • Lower withdrawals

Sustaining society

Savings and healthier behaviours have a positive societal impact through:

  • Stronger savings culture
  • Lower pension reliance on the state and family
  • Better client outcomes

The Challenge:

5 controllable behaviours and 3 conditions lead to 80% of credit defaults and retirement shortfalls

The Behaviours
  • Corrosive consumption
  • Lack of financial protection
  • Not saving for emergencies
  • Excess secured debt
  • Low retirement savings

The Conditions
  • Unable to deal with unplanned expenses
  • Unsustainable and expensive debt
  • Not being protected in retirement

Sources

Journal of Economics and Finance and other sources

Discovery’s response
Make people manage their money better

Activated through our Shared-value Insurance model

Along with our partners, we use the Vitality Shared-value Insurance model to change the way consumers worldwide experience insurance

How we do this

As a catalyst for behaviour change, we incentivise and reward our members to achieve lower rates on borrowing, higher rates on saving, along with better financial management to generate greater wealth.

Sustaining our business

This supports Discovery, our partners and networks through improved financial behaviours supporting:

  • Spending through the bank
  • Lower defaults
  • Reduced lapses
  • Greater margins and profits

Sustaining society

Savings and healthier behaviours have a positive societal impact through:

  • Reduced reliance on the state in retirement
  • Greater national investment levels
  • Reduced financial bad habits

Our business is completely aligned with the health and wellbeing of our clients: if they are healthier, our business is more profitable and sustainable, and we can share more value with our clients and partners. Ultimately, by being more competitive and effective in driving our Shared-value Insurance model, we are also driving social good. That’s a perfect, shared-value cycle.

- Adrian Gore, Discovery Group CEO

Make people healthier and live longer

Non-communicable diseases such as cardiovascular diseases, lung diseases, diabetes and certain cancers continue to place an increasing burden on healthcare systems across the world. The cause of these lifestyle diseases includes behaviours such as physical inactivity, smoking, substance abuse and poor nutrition – although genetic, environmental and psychological factors also play a role. Rapidly increasing rates of non-communicable diseases not only drive up costs and overload healthcare systems, but also negatively impact economic productivity. The World Health Organisation estimates that for every 10% increase in non-communicable disease mortality, economic growth is reduced by 0.5%.

Vitality is the world’s leading science-based behavioural change programme that encourages healthy activity among employees and rewards them for it. In addition to a healthy lifestyle being more enjoyable, it has been proven that Vitality Health members live longer and are less likely to develop lifestyle-related diseases.

Vitality’s success in incentivising positive behavioural change that drives healthier lives, benefits economies, and helps prevent NCD is well researched. Read recent research and scientific studies here.

Positive behavioural change through Vitality has a broader social impact by reducing hospital claims. It represents shared value in action: lower hospital claims means that members are living healthier lives; their medical scheme is insuring less risk; the insurer is more profitable and able to maintain capital adequacy, increase investments in innovation and preserve employment; and there is less burden on healthcare systems.

In South Africa, we performed over 8.8 million Vitality Health screenings in the 2020 financial year. With the onset of COVID-19 and the need to drive increased awareness of health and wellness, Vitality launched a virtual Vitality Health Check-in. This enables members to manage and screen for health risks through a telephonic consultation with a wellness specialist.

The Vitality Health Check is a simple and convenient set of essential health tests of:

Blood pressure
Blood glucose
Cholesterol
Weight assessment, which includes weight, height and waist circumference
Smoker status

These five measures are key to assessing the risk of developing cardiovascular disease and diabetes.

Discovery Health runs a number of shared-value initiatives to improve the quality of care for members and decrease healthcare costs, which benefits all scheme members and the broader healthcare system. These initiatives enhance patient outcomes by coordinating care, and use digital health tools to improve access for healthcare providers to critical information.

In the United Kingdom, Vitality Healthy Mind has been successful in promoting healthy mental wellbeing activities as a new pillar of the programme. Over 60 000 members have engaged with the product, logging approximately 1.5 million mindfulness sessions since its launch in 2018 through a range of mobile apps. Healthy Mind continues to offer a preventative level of mental wellbeing support alongside clinical support for more serious issues in the form of counselling and cognitive behavioural therapy through Vitality’s Talking Therapies network, available to all VitalityHealth members.

Assisting our client manage their corporate needs

When employers embark on promoting better health among their employees, there are no losers.

- Neville Koopowitz, CEO Vitality UK

Discovery provides shared-value insurance for corporates to encourage healthy behaviours that benefit both employers and employees. As healthy lifestyles improve their overall health, it in turn leads to lower claims for the insurer through decreased mortality and morbidity risk, lower lapses and longer investment periods. The decrease in claims creates a surplus that is used to fund additional benefits for the employees, further encouraging and rewarding positive behaviour change. The result is a structural transformation of insurance – additional economic value is unlocked, creating benefits for the employee, the employer and the insurer. Also, society benefits from reduced healthcare costs and enhanced economic performance. It is this emergence of shared value that makes the case for employers to invest in the health of their staff so compelling.

Impact of employees engaging in healthy behaviour

Employee

  • Improved emotional, financial and physical wellbeing
  • Better value through upfront and ongoing premium and discounts and paybacks.
  • Improved access to primary healthcare.
  • Improved retirement provision through increased savings.

Employer

  • Improved productivity
  • Increased employee retention
  • Reduced healthcare burden
  • Healthier workforce

Discovery

  • Decreased mortality and morbility risk, resulting in lower claims.
  • Lower lapses and defaults.
  • Increased assets, invested in for longer durations.

Healthy Company, Discovery’s digital employee assistance programme and wellness solution, proactively identifies and supports both at-risk employees and those that are well, throughout their work and life journey. Since its launch in 2018, Healthy Company has provided 60 000 employees with comprehensive employee assistance and enhanced wellness support.

In 2020, we introduced Healthy Company Core as a new offering that leverages the best of our Healthy Company digital assets to support employees across the four pillars of physical, emotional and financial wellbeing, as well as legal services. Data-driven insights are provided to employers to support optimal management of their workforce.

Our integrated approach to supporting employers and their employees extends to the physical manifestation of health and wellness solutions on-site. One such offering is access to toll-free, 24 hour support line for assistance with legal issues, financial concerns and emotional support.

In South Africa, access to quality private healthcare is limited and the majority of the population relies on an over-extended public health system. Discovery recognises the need and importance to find solutions to extend access to quality healthcare to more people at an affordable price. Discovery Primary Care is a unique healthcare product that enables employers to provide their low-income employees and their families with affordable quality private healthcare and wellness management.

Discovery Primary Care is meeting an important business and social need. However, Circular 80 published by the Council for Medical Schemes in December 2019 prohibits the continued operation of Primary Care products by March 2021 and would strip affordable and highly valued healthcare cover from those currently insured under Primary Care and related policies. Subsequently, after consultation with key stakeholders and further review, the Council for Medical Schemes published Circular 56 in August 2020, extending this period to 31 March 2022. Discovery is engaging closely with the Council for Medical Schemes and other regulators to find the most appropriate way forward, given the wide-ranging implications for existing policyholders and considering the affordability and access that Primary Care products provide. Importantly, the Demarcation Regulations have facilitated the growth of an innovative primary care industry in South Africa, including the development of carefully structured rates, networks and primary healthcare pathways designed specifically for this market. These products represent good value for employers and their employees who cannot afford medical scheme cover, and we believe a solution will be found in consultation with the regulators.

In the United Kingdom, VitalityHealth has continued to evolve its products for the broader employee population of its business clients. Vitality at Work offers benefits including full cover for physiotherapy, up to eight sessions of cognitive behavioural therapy or counselling, and access to primary care services through a Vitality general practitioner.

Given the challenges facing public healthcare, we believe that Vitality is more relevant than ever in promoting positive behavioural change that has a measurable impact on health outcomes. It also represents a shift from healthcare that is focused on illness to healthcare focused on wellbeing, incentivised through the right behaviours to achieve the greatest impact.

Make people better drivers and build better businesses

Discovery is passionate about creating a nation of great drivers. Our Shared-value Insurance model helps reduce harm on our roads by monitoring driving behaviour and incentivising drivers to improve their driving by adhering to key safe-driving principles: avoiding speeding, harsh acceleration and cornering, and being more alert while driving by not using cellphones and observing a safe following distance. Better drivers mean fewer accidents and safer journeys for our clients and others on South Africa's roads.

Over 90% of road accidents are caused by driving behaviour. The UN Global Road Safety initiative creates an opportunity to #SpeakUp and draw attention to potential solutions, which we feel should be linked to the principles of behaviour change that have been proven to work.

- Anton Ossip, CEO of Discovery Insure

Discovery Insure supports South Africa’s National Development Plan by focusing on key road safety initiatives including Safe Travel to School, a programme that uses Discovery Insure’s intellectual property of improving driving behaviour for clients to improve the driving behaviour of scholar transport drivers

In May 2019, Discovery Insure announced a commitment to improve the lives of one million people (over and above those of its clients) through improved road safety by 2023. Discovery called for a constructive behavioural approach to solutions to road safety to mark the 5th United Nations Global Road Safety week, joining global leaders in the campaign to #SpeakUp and Save Lives.

Healthier businesses for healthier economies

Business growth is a national priority as the private sector contributes significantly to economic growth and reducing unemployment. Discovery Business Insurance believes that businesses that take proactive steps to grow have lower insurance risks, providing an opportunity for shared value where clients, Discovery and society as a whole can benefit.

Through the driver behaviour programme Vitality Drive for Business, businesses use telematics technology and incentive-based insurance principles to encourage and reward good driving behaviour. Drivers in a business can also be rewarded in their personal capacity through Driver Active Rewards, earning rewards from one of our partners by achieving set good driving targets tracked through our leading technology

Through our partnership with endeavor, a global leader in supporting high-impact businesses, business clients of all sizes in south africa have access to a diagnostic tool, the business health check, that helps them identify key areas of risk and development to grow their business. We also offer access to a tailored network of partners to provide entrepreneurial support, cyber security, web services, brand and communication support, and more.

Help people manage their money better

Rewarding healthy financial behaviour

The low savings and retirement funding gap in South Africa mean that only 6% of South Africans have adequate retirement funding. Without it, people are either dependant on the state, their children or grandchildren, or on debt; none of which are sustainable options. Also, the impact of market turbulence is dramatic on investors, pension funds and people trying to build up their retirement savings, especially considering the impact of the COVID-19 pandemic.

In 2007, Discovery Invest revolutionised the South African investment space and built a business off the same insight that has made Discovery a success: by changing behaviour, we can tackle the South African savings crisis head-on and change the South African landscape for the better. To help our members achieve financial independence, Discovery Invest rewards heathy financial behaviour by incentivising our members to save more, save earlier, retire later and drawdown as little as possible during retirement. Integrated across other Discovery products, we give our members bonuses on their investments if they live healthier, drive better and manage their finances better. Essentially, we help our members earn additional returns, beyond market performance, just by living well.

Discovery Invest’s success in driving smarter choices

6.88% lower drawdowns
R7 878 million value accrued to clients*
17.04% average policy term on pre-retirement products (how many years until retirement from when a policy starts)
R2 836 million total value of rewards earned (paid)*

* The cumulative amount of rewards for exhibiting the three behavioural changes of saving earlier, withdrawing less and staying healthy. These are rewarded through boosts to investment amounts or through fee reductions.

This shows shared value in action; by rewarding smarter choices, members receive more value and invest more with Discovery for longer, which enhances the sustainability of our business and allows us to continue innovating and rewarding smarter choices that have a positive societal impact by closing the retirement gap.

Discovery Limited was approved as a signatory to the United Nations supported Principles for Responsible Investment in September 2020. As an institutional investor, Discovery has a duty to act in the best long-term interests of our beneficiaries. We also recognise that we can exert a positive influence in directing good environmental, social and governance practices, policies and behaviour of investees and financial institutions.

Our commitment extends to the six principles of the PRI, being:

1

We will incorporate environmental, social and governance issues into investment analysis and decision-making processes

2

We will be active owners and incorporate environmental, social and governance issues into our ownership policies and practices

3

We will seek appropriate disclosure on environmental, social and governance issues by the entities in which we invest

4

We will promote acceptance and implementation of the Principles within the investment industry

5

We will work together to enhance our effectiveness in implementing the Principles

6

We will each report on our activities and progress towards implementing the Principles.

We will be:

Monitoring quarterly reports provided by our investment managers to ensure consideration of environmental, social and governance factors, and assess that they show active ownership in, for example, proxy voting and transparent management engagement

Considering environmental, social and governance performance and ratings in addition to credit ratings when selecting internally managed investment in non-equity asset classes

The Capital, Currency and Investment Committee, a sub-committee of the Group Executive Committee, is responsible for monitoring and integrating responsible investment principles as required.

Ninety One (previously Investec Asset Management) is nominated by Discovery Invest to manage a substantial portion of assets for Discovery in South Africa. Ninety One has a comprehensive environmental, social and governance policy in place and integrates environmental, social and governance considerations into investment decisions. The company is a signatory to the Principles for Responsible Investment and endorses the Code for Responsible Investing in South Africa.

Details on Ninety One’s approach to sustainable/responsible investing can be found here

Discovery’s Global Investment Selector leverages advanced digital technology to enable clients to choose and compare investment choices from the Global Alpha Investment Choices. While there are no set environmental, social and governance measures, the Selector allows clients to filter for various environmental, social and governance criteria. For the Insight List, funds that are considered as eligible against environmental, social and governance criteria are indicated as such in the profile.

In 2020, Discovery Invest broadened our product range to include a number of international investment options, giving our members access to a wide range of investment choices for diversification by currency, geographic region and asset class. These investment choices are managed by some of the most experienced international investment providers and cover a range of investment themes and geographic regions.

Our international risk-profiled solutions with allocations are managed by BlackRock, which has been a signatory to the Principles for Responsible Investment since 2008. Our international share portfolios with allocations are advised by Goldman Sachs Asset Management, which has been a signatory to the Principles for Responsible Investment since 2011.

In the United Kingdom, VitalityInvest has embedded the Vitality programme into VitalityInvest’s products, at no cost to its members. In keeping with the philosophy of promoting healthy ageing, access to the Vitality programme was automatically embedded into all of VitalityInvest’s products in July 2019.

Life insurance that rewards a healthy lifestyle

Discovery Life has shifted the focus of life insurance to reward clients for living a healthy lifestyle by applying the Shared-value Insurance model, rather than just paying out in the case of a life-changing event. This enables clients to actively derive value from their life insurance policy through smarter choices.

The surplus generated by clients manifests in a range of unique benefits and financial rewards including Discovery Life’s PayBack Benefit, which provides clients with a percentage of their premiums.

Today, life expectancies are higher than ever before. For Discovery Vitality members, the average lifespan is around 81 years of age. Discovery Life has looked at ways to better support clients going into retirement in a way that further supports healthy living. Clients can now earn significant premium discounts during their retirement years by maintaining engagement with the Vitality programme pre-retirement, with premiums progressively reduced after retiring. And with Vitality Premium Levellers, long-term premium sustainability can be achieved with earned premium reductions of up to 40% being possible.

For detail on VitalityLife’s Dementia and FrailCare Cover product, see Our stories: Care for an aging population.

The world’s first behavioural bank

By and large, South Africans are big borrowers and poor savers. A combination of habits like reliance on credit and a disinclination for saving leaves people significantly exposed to financial crises in both the short and long term, putting us in a position that’s financially precarious, both individually and as a society.

Discovery believes that incentivising people to make better financial decisions will generate higher savings levels, lower risk and increased wealth for society as a whole.

Through Vitality Money, Discovery is helping clients understand and practice five key financial behaviours:

Spend less than you earn
Save regularly
Insure for adverse events
Pay off your property
Invest for the long term.

Discovery Bank clients have access to a range of tools to help them manage their money better and become financially stronger. These include a spend manager to help budget smarter and manage monthly spend, a retirement planner, a financial education video series and access to discounted advanced education courses, debt tools and personalised goals – all of which help our clients make smarter financial choices.

With over 370 000 accounts and over 276 000 Discovery Bank clients with retail deposits of over R3.7 billion since its launch in November 2018, the shared value of behavioural banking is already becoming evident.

We’re committed to a banking model that’s not just good for the bank, but good for consumers as individuals, and good for our nation’s economy.

- Phuti Sebidi, Chief Client Officer at Discovery Bank

Innovation in businesses, products and services

Innovation is deeply set in Discovery’s culture. The Group has a long history of disrupting financial services driven by its core purpose and value-centric approach.

Running for nine years, our Inspiring Excellence competition liberates the creativity and innovation of our people, capitalising on their collective intelligence to identify breakthrough ideas that dazzle our customers, partners and employees. The competition is a structured process to identify, build and select innovations that are actively championed by leadership across the business in clearly defined categories of product, technology, operational, and people and social.

We’re often asked, “can you keep innovating?” The truth is, I find that the more you innovate, the more you can innovate. Most innovation in companies is event based. A competitor comes up with something, and the company responds. We do the opposite. Our leaders are always on a treadmill to create and launch new ideas.

- Adrian Gore, Discovery Group CEO

This year’s revised approach to Inspiring Excellence has seen participation increase by over 40% in the number of entries received, as well as greater numbers of cross-functional teams forming to compete. In addition, the competition has been opened to a wider audience, with permanent employees at all levels given the opportunity to submit ideas (as opposed to management level and above in previous years).

For information on product and service enhancements in 2020, see the 2020 Integrated Annual Report.

Dynamic pricing and rewards driving behavioural change

When building its offering, Discovery’s key insight was to identify the link between lifestyle choices and insured risk, and to harness the principles of behavioural science to incentivise clients to make smarter choices. It thus reduced the risk for the insurers while improving the quality of life of its clients.

- Adrian Gore, Discovery Group CEO

Through its Shared-value Insurance model and platform, Discovery – along with its global partners – is changing the way consumers experience financial services. What was once a grudge purchase based on pre-existing risk is now a dynamic and rewarding partnership that encourages healthy behaviour. Vitality operates an economy of behavioural change, where the currency is healthy choice and the interests of client, insurer and society are aligned.

Discovery uses data extensively, not just in terms of analysing behaviour but ensuring customers are incentivised appropriately. Our foundation in behavioural economics and science-led approach support our ability to extract insight and value from our vast data-set on health, driving and financial behaviours. This powers our ability to understand, at a granular level, the risk profile of each member and reward accordingly.

In Discovery Bank, we apply dynamic interest rates to savings and interest on credit based on a client’s risk profile and their success in making smart financial choices. Rewards can be increased by linking to Vitality and integrating across Discovery’s product universe.

During 2020, Discovery Insure introduced the Dynamic Distance cash back benefit that provides up to a 25% motor premium cash back based on mileage driven. This reflects a member’s reduced risk if they are driving less, especially due to lockdown regulations to limit the spread of COVID-19. In addition, clients continue to enjoy the fuel benefit of up to R800 cash back every month.

Discovery Life is continuing the revolution of life insurance away from an inflexible, one-size-fits-all approach to one that is dynamic and empowers its client to derive value from their life insurance through healthy behaviour. We have added a new dimension to the tangible value in each client’s insurance policy – capturing the durational impact of shared value.

Within Discovery Life’s operating model, shared value refers to the actuarial surplus that is created when the actual experience is better than the underlying assumptions used to price our insurance policies due to the positive behaviour of our policyholders.

Historically, we have driven these positive experience variances by encouraging policyholders to improve their underlying mortality and morbidity risk by engaging with Vitality, and through significant rewards on their Discovery Life Plan like the PayBack benefit. An element of the model that is equally as valuable, but which is less well known, is that the quantum of the shared value created is enhanced when the time over which it is returned is extended.

This is because Discovery Life realises the mortality, morbidity and lapse saving over a greater duration and hence the overall value derived is higher.

Discovery Life is now allowing policyholders to extend PayBack payment periods and thereby access the additional value accrued over time in the policy through the Double PayBack option. In receiving their PayBacks later in the duration of the policy, we are able to significantly increase the value that can be returned to them through the PayBack Benefit.

Globally, insurers are dedicating substantial effort to designing new products and services to meet the needs of an ageing population. Not only is the trend of an ageing population present within Discovery Life’s client base, but this trend is accelerating given the positive impact that Vitality is having on the life expectancies of our policyholders. This means that we need to make sure that our product remains valuable and sustainable given the increased duration which clients are now keeping their policies.

To enhance value and sustainability for our clients in retirement, they can now control the future sustainability of their premiums through active health and wellness management. We have refocused our Shared-Value insurance mechanism through the Vitality Premium Leveller and Longevity Vitality Rating benefits, in addition to extending the maximum ages for Integration.

Our Stories

Specialised healthcare programmes for specific conditions

Care for an aging population

Related documents

Supplementary environmental, social and governance information

Discovery 2020 Integrated Annual Report

 
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