Discovery Limited · JSE:DSY
Discovery — Investor Presentation (March 2021)
43 slides from Discovery's investor presentation, March 2021
Slide 1: Discovery Life Business and Product Update
DISCOVERY LIFE BUSINESS AND PRODUCT UPDATE
Slide 2: Business Update, Product Update, Adviser Support
DISCOVERY LIFE BUSINESS PRODUCT ADVISER UPDATE UPDATE SUPPORT
Slide 3: Business Update
DISCOVERY LIFE BUSINESS PRODUCT ADVISER UPDATE UPDATE SUPPORT
Slide 4: Strong financial performance in a challenging environment
STRONG FINANCIAL PERFORMANCE IN A CHALLENGING ENVIRONMENT Six months to December 2020 New business Strong new business performance Exceptional lapse experience in the market to R1 162m Discovery Life market share compared Positive embedded value to the 5 biggest competitors* lapse variances 30% 100%
Slide 5: Robust position evident in strong cashflow, capital coverage and liquidity
ROBUST POSITION EVIDENT IN STRONG CASHFLOW, CAPITAL COVERAGE AND LIQUIDITY Strong capital position maintained throughout the High levels of liquidity coverage pandemic c.R3.25bn Assets available R4.1bn R4.1bn to meet liquidity needs 182% 182% R2.8bn 172% 125% of SCR target DEC-19 JUN-20 DEC-20 DEC-1
Slide 6: Our strategic response to the pandemic
OUR STRATEGIC RESPONSE TO THE PANDEMIC GP initiated COVID-19 COVID-19 SA vaccine DISCOVERY Wellbeing Vitality Oximeter virtual information Business COVID Alert programme Connected talks at Home at Home benefit consults hub Support SA app support Care COVID-19 concessions till Dec 20 Keep every staff
Slide 7: Shared-value assets leveraged in Discovery Life's COVID response
SHARED-VALUE ASSETS LEVERAGED IN DISCOVERY LIFE’S COVID RESPONSE Premium relief options Accelerated innovation Four market leading options helped provide the most vulnerable groups Market-first with cover flexibility and sustainability covering the acute impact of COVID-19 and similar diseases in co
Slide 8: South Africa's second wave more severe but rapidly decreasing
SOUTH AFRICA’S SECOND WAVE ALSO MORE SEVERE BUT RAPIDLY DECREASING SA’s second wave more serious than first, Comparison between waves using Discovery data and started in holiday season South Africa daily new infection trends Higher socio-economic classes hit harder 25 600 DL and DH Deaths 1.5x peak
Slide 9: Understanding immunity
UNDERSTANDING IMMUNITY Expect majority of excess deaths to be Expect 51-57% population infected due to COVID-19 RSA (natural) excess deaths and reported confirmed COVID-19 deaths Deaths = [ Population infected ] x [ Infection Fatality Rate ] 20 ∴ Population infected = [ Deaths / Infection Fatality R
Slide 10: Factors that influence COVID-19 waves
FACTORS THAT INFLUENCE COVID-19 WAVES COVID-19 Wave = (1-Immunity) x P(contact) x Risk index Herd immunity Behaviour Resilience index Reinfection rates COVID-19 variants Vaccines Community prevalence
Slide 11: The likelihood of a third wave
THE LIKELIHOOD OF A THIRD WAVE Incremental deaths under the medium scenario Projected deaths vs Total second wave deaths Scenarios assume IFR = 0.39% and 1/3 reinfection expected Feb-Jun Jul-Dec deaths 2,000 1,800 1,600 Second wave run-off 0.2x 0x 16.6k 1,400 1,200 1,000 Super spreader at 800 600 Ea
Slide 12: COVID-19 claims experience peaked in January 2021 and has run down
COVID-19 CLAIMS EXPERIENCE PEAKED IN JANUARY 2021, AND HAS RUN DOWN MATERIALLY AS AT MID-FEBRUARY Significant provision utilisation during the Total provisions in excess R1bn remain even Amplified relevance of shared-value life January peak, has abated during February after allowing for Jan and Feb
Slide 13: Individual and Group Life COVID-19 claims: supporting beneficiaries
INDIVIDUAL AND GROUP LIFE COVID-19 CLAIMS: SUPPORTING BENEFICIARIES COVID related deaths by BMI category Death claim payouts by occupation Death claims by age group Life Cover (per 1000 lives) (per 1000 lives) Normal weight = Broker 20 - 29 0.39 18.5 - 24.9 IT Total claims 30 - 39 Severe Illness Ove
Slide 14: New business strategic focus areas
NEW BUSINESS STRATEGIC FOCUS AREAS • Provide clients with cutting edge products that adapt to their needs Continued product innovation • Encourage diversification of clients’ financial portfolio • Provide enhanced offshore risk planning solutions • Improve the ease of doing business with digital inn
Slide 15: Trends in the industry reaffirm our strategy
TRENDS IN THE INDUSTRY REAFFIRM OUR STRATEGY Current trends “Insurance is shifting from its 95% of insurers expect an increase in the use of traditional roots of providing advanced analytics over the customers with a product that protects against loss towards next three years. ➔ Virtual Underwriting
Slide 16: Product Update
DISCOVERY LIFE BUSINESS PRODUCT ADVISER UPDATE UPDATE SUPPORT
Slide 17: Why offshore risk protection is important
WHY OFFSHORE RISK PROTECTION IS IMPORTANT Increased globalisation The value of diversification Relative volatility of currencies in emerging and developed markets Daily volatility people migrate internationally every year 1.0% 0.6% 2014 2015 2016 2017 2018 2019 2020 2021 KOF Globalisation Index – So
Slide 18: Dollar Life Plan video
Dollar Life Plan video DOLLAR VIDEO
Slide 19: Discovery Life
Discovery Life Variety of Incentives Bespoke and Cost business and and best-of-breed effective ownership rewards cover structures
Slide 20: Discovery Life International
Discovery Life International Variety of Cost business and effective ownership structures Incentives Bespoke and and best-of-breed rewards cover
Slide 21: Discovery Life International
Discovery Life International Leveraging shared-value to create enhanced 01 certainty and financial rewards 02 Expanding access and flexibility Unlocking opportunities across all client 03 segments Automating the new business process to 04 ensure ease of doing business
Slide 22: Leveraging shared-value to create enhanced certainty and financial rewards
LEVERAGING SHARED-VALUE TO CREATE ENHANCED CERTAINTY AND 01 FINANCIAL REWARDS *Replacing the Exchange Rate Protector Yearly Discount Accumulation 1% Minimum discount of 0.75% 15% increasing to 0.5% 21% based on Vitality 0.25% engagement 0% 3 periods of exchange rate discounts extending for 3 years e
Slide 23: Introducing PayBacks on the Dollar Life Plan
LEVERAGING SHARED-VALUE TO CREATE ENHANCED CERTAINTY AND 01 FINANCIAL REWARDS INTRODUCING PayBacks on the Dollar Life Plan Clients can opt to Continuous and frequent rewards Blue Bronze Silver Gold Diamond through PayBacks accrue their PayBacks every 5 years and have them paid out in one lump sum un
Slide 24: Dollar Life Plans
LEVERAGING SHARED-VALUE TO CREATE ENHANCED CERTAINTY AND 01 FINANCIAL REWARDS DOLLAR now available on LIFE PLANS now available on VRLD3 VRLD2 DOLLAR VHC 65+ VRLD1 LIFE PLANS Up to 10% Working age Retirement age Improving client access to Vitality so that they can For improved leverage the shared-val
Slide 25: Expanding access and flexibility
02 EXPANDING ACCESS AND FLEXIBILITY Owner AVAILABLE IN ALL BUSINESS Clients can pay from an Clients can ASSURANCE STRUCTURES: offshore bank account now pay Premium Life payer assured Key person cover or a Discovery Invest annually Contingent liability insurance International in advance Buy-and-sell
Slide 26: Expanding access and flexibility
02 EXPANDING ACCESS AND FLEXIBILITY now available for Dollar Swap Option now gives access to the Return of clients’ offshore trust fees Vitality Exchange Rate Protector Returned after five years when Purple clients convert
Slide 27: Unlocking opportunities across all client segments
03 UNLOCKING OPPORTUNITIES ACROSS ALL CLIENT SEGMENTS Incentives and rewards Variety of business and ownership structures Cost effective Bespoke and best-of-breed cover
Slide 28: Unlocking opportunities across all client segments
03 UNLOCKING OPPORTUNITIES ACROSS ALL CLIENT SEGMENTS Cost Up to 42% upfront effective and ongoing premium discounts Up to 21% discounted exchange rates The most cost- effective premium in the market
Slide 29: Unlocking opportunities across all client segments
03 UNLOCKING OPPORTUNITIES ACROSS ALL CLIENT SEGMENTS Incentives and rewards Up to 50% PayBacks Dollar Cash Conversion Dollar College Funder Benefit
Slide 30: Unlocking opportunities across all client segments
03 UNLOCKING OPPORTUNITIES ACROSS ALL CLIENT SEGMENTS Bespoke and best-of-breed Access to the most cover advanced medical devices globally Access to the best medical treatment in the world Higher maximums
Slide 31: Unlocking opportunities across all client segments
03 UNLOCKING OPPORTUNITIES ACROSS ALL CLIENT SEGMENTS Variety of business and Available to ownership Offshore trusts and structures companies Key person Contingent liability Buy-and-sell
Slide 32: Automating the new business process to ensure ease of doing business
AUTOMATING THE NEW BUSINESS PROCESS TO ENSURE EASE OF DOING 04 BUSINESS Document submission Simultaneous operations Refined application enhancements Underwriting and risk More comprehensive application Multiple attachment assessment done in to ensure all information is upload functionality on parall
Slide 33: New Dollar Life Plan offer
R10.90/$ NEW DOLLAR LIFE PLAN OFFER Lock in an exchange rate of for three years when adding Vitality Exchange Rate Protector with 6 years of additional lock in at discounts of up Available between to 21% thereafter End May – 31 August 2021
Slide 34: Adviser Support
DISCOVERY LIFE BUSINESS PRODUCT ADVISER UPDATE UPDATE SUPPORT
Slide 35: Vitality Coach video
Vitality Coach video VITALITY COACH VIDEO
Slide 36: Vitality Coach
Vitality Coach Coaching Discovery Life clients to reach their Vitality status goals Best-in-class engaging Ongoing, personalised Extensive omni-channel, onboarding journey engagement real-time support for queries Welcome call to new Discovery Nudge existing unengaged clients and Discovery Service bo
Slide 37: World-leading benefits across our product suite
WORLD-LEADING BENEFITS ACROSS OUR PRODUCT SUITE Bank Integrator Global Education Protector Child Protector Benefit Blue Bronze Silver Gold Diamond “Neobanks & #1 World’s most innovative life Highest child illness cover Specialised players” insurance product in 2018 in the market category for 2019 Fu
Slide 38: Bank Fee PayBack Offer
BANK FEE PAYBACK OFFER BANK FEE PAYBACK OFFER Get back up to of your qualifying Discovery Bank fees for three years Available between
Slide 39: Child Protector & Global Education Offer
CHILD PROTECTION OFFER CHILD PROTECTOR & GLOBAL EDUCATION OFFER Minimum Guaranteed funding of up to of your children’s Available between
Slide 40: Suite of limited offers providing unmatched value
SUITE OF LIMITED OFFERS PROVIDING UNMATCHED VALUE R10.90/$ New Dollar Life Bank Fee PayBack Offer Child Protection Offer Plan Offer Lock in an exchange rate of Get back up to 100% of your Minimum guaranteed funding of up for three years qualifying Discovery Bank fees for to 50% of your children’s te
Slide 41: Adviser support
ADVISER SUPPORT Comprehensive sales Product brochures to dashboards showing Provides specific share with clients, See projected Training and an overview of clients’ details on each special illustrating our premiums, cover, support available on portfolios offer comprehensive cover Paybacks, and more
Slide 42: Timelines
TIMELINES 5 April End May Q3 Limited offers New Dollar Life Plan New Dollar Life Plan (phase 1) (phase 2) Bank Fee PayBack offer New business product Annual billing R10.90/$ New Dollar Vitality on Dollar Child Protection offer Life Plan offer New ownership Offshore billing structures Streamlined new
Slide 43: Discovery Life Business and Product Update
DISCOVERY LIFE BUSINESS AND PRODUCT UPDATE