Discovery Limited · JSE:DSY
Discovery — Investor Day (November 2024)
177 slides from Discovery's investor day presentation, November 2024
Slide 1: Discovery Capital Markets Day
Discovery Capital Markets Day November 2024
Slide 2: Agenda
Agenda Adrian Gore 1 Discovery Group and creation of Vitality Group CEO Emile Stipp 2 Vitality Shared-value model Vitality Chief Actuary Q&A and break Shaun Matisonn 3 Vitality Network Vitality Network CEO David Ferreira and Candy Ding 4 Ping An Health Insurance Vitality China CEO and Ping An Health
Slide 3: Discovery Group
Discovery Group Adrian Gore 3
Slide 4: Discovery Group FY24 performance overview
Discovery Group FY24 performance overview Vitality Discovery Health Discovery Insure Discovery Invest Vitality Network Discovery Bank Discovery CEB Discovery Life Vitality Health Vitality Health International Vitality Life Normalised Core new Total income from Normalised Headline operating profit bu
Slide 5: Entering a new phase in the lifecycle of the Group
Entering a new phase in the lifecycle of the Group Operating profit by phase of growth, Rm 12,000 22.3% 9.1% 15-20% CAGR CAGR p.a. 10,000 Unfettered organic Big investments Scaled organic growth in New growth (FY25-FY29) 8,000 6,000 4,000 2,000 - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 201
Slide 6: Positive impact across financial metrics
Positive impact across financial metrics Where we Where we are Where we are were today headed Average (FY16-FY23) (FY24) (FY25-FY29) Earnings growth 9% 17% 15-20% CAGR CAGR % spend on New 15% 8% c5% (maxed at 25%) Cash conversion 56% 66% 60-70% RoE 13% 13% 15-20% FLR 22% 20% 10-20% Dividend cover 5.
Slide 7: Well positioned for future growth
Well positioned for future growth Expect continued organic growth Profitability Inherent organic growth from Bank and Vitality Limited: Discovery Group 12.5% to 17.5% 20% to 30% average earnings average earnings growth p.a. growth p.a. (FY25-FY29) (FY25-FY29) 7 Forward looking information on this sl
Slide 8: Discovery SA
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Slide 9: Strong focus and ambition for Discovery South Africa
Strong focus and ambition for Discovery South Africa Focus areas: Discovery Health Discovery Insure Ensuring each business is market leader in terms of a Discovery Invest Discovery Bank Discovery CEB Discovery Life market share, margin, product innovation and enhanced customer value Scale Discovery
Slide 10: Strong SA performance
Strong SA performance Gross new business API Operating profit Capital position R19.7bn R9.7bn 19% growth 16% growth R million R million IFRS 17 Jun 23 Jun 24 20,000 10,000 Cover Cover 16,000 8,000 Life 1.8x 1.8x 12,000 6,000 Insure 1.6x 1.6x 8,000 4,000 4,000 2,000 Bank1 1.3x 1.3x - - DHMS solvency
Slide 11: Ensuring each business is a market leader
Ensuring each business is a market leader Discovery Discovery Discovery Discovery Discovery Life Health Invest Insure Bank 27% 58% 3rd #1 #1 Market market market largest in net Fastest growing Bank brand share share share1 flows2 short-term insurer by GWP #1 Retail affluent credit card new business
Slide 12: Discovery Bank robust growth and profitability
Discovery Bank robust growth and profitability Strong client and account growth Progress towards breakeven Bold ambition Total clients Total accounts Profit (Rm) +36% +40% H1 2022 H2 2022 H1 2023 H2 2023 H1 2024 H2 2024 200 to >950k to 2.3m H2 R400m 100 Breakeven operating profit 0 growth p.a. -100
Slide 13: Vitality Shared-value model
Vitality Shared-value model 13
Slide 14: Vitality Shared-value business model
Vitality Shared-value business model Consistent value drivers across the business yielding superior outcomes relative to traditional insurance books Upfront selection Persistency Claims Profitability 17% 42% 9% Community- HEALTH Claims savings from Lower lapses Claims reduction rated and not initial
Slide 15: Global intersecting trends have amplified the importance of the Vitality model
Global intersecting trends have amplified the importance of the Vitality model Nature of risk Technology • Risk due to modifiable behaviours: 37% of • Artificial intelligence and machine learning healthcare expenses are due to modifiable advances: new tools are revolutionising diagnostics, behaviour
Slide 16: Discovery's data set is verifiable, comprehensive and longitudinal
Discovery’s data set is verifiable, comprehensive and longitudinal, enabling effective data science and machine learning Diagnoses & Risk predictions Health records Clinical and wellness data linked longitudinally medication Pathology & Transactions radiology Episodes of Property Using data from 200
Slide 17: The effect of behaviour change exceeds expectations
The effect of behaviour change exceeds expectations Significant causal impact Increases with age and chronicity Highly elastic Mortality reduction by physical activity level Change in healthy life span for a 40-year-old Young moderately healthy male from changes in behaviour 45-65 age group 65+ age
Slide 18: Traditional models are inefficient; significant value from causality, elasticity and alignment
Traditional models are inefficient; significant value to be gained from causality, elasticity and alignment Actuarial pricing of life assurance is based on underwriting data at contract inception and the premiums payable fixed at that point. It ignores the customer’s behaviour over the term Life of
Slide 19: Dynamic pricing aligns risk and premiums
Dynamic pricing aligns risk and premiums, and results in a larger book over time Pricing of risk Portfolio of customers over time Static, premium remains flat Healthy members lapse, risk status of book deteriorates Combined risk 1.0 mortality curve Millions 0.8 -55% -72% 100 Premium 0.6 449k lives T
Slide 20: Significant value creation in life insurance
Significant value creation in life insurance VoNB is flat or increasing by Status Results in positive value creation VoNB by status Indicative Vitality value creation, VNB per unit of premium Depends on Bronze Silver Gold Platinum engagement Business Aligned, as long as decision how Recommend flat o
Slide 21: The impact on health insurers is significant on all measures
The impact on health insurers is significant on all measures Distribution of clients by healthcare costs Impact of doing Next Best Action | Net savings to health funder Member base by different healthcare utilisation Diabetes Hypertension Combined hypertension scores and diabetes 100% 100% 100% 80%
Slide 22: Leveraging Aladdin Wealth and Vitality for a quality retirement
Leveraging Aladdin WealthTM and Vitality to create a pathway to a quality retirement Controlling health is key for Cost associated with being affordability in retirement sick in retirement Healthspan Sick years Retirees in poor health spend 3x more on 55.9 out-of- pocket expenses than those in Healt
Slide 23: Personal Health Pathways
Personal Health Incentivised engagement - behaviour change through Pathways actuarially-matched, compelling incentives, communicated in a personalised way, manifesting as 2 rings Next generation AI recommendations - combined Digital health platform utilisation of behaviour & data to suggest hyper-pe
Slide 24: Vitality
Vitality UK Vitality Vitality Network Vitality Health International Vitality 24
Slide 25: Diverse market opportunities have grown into a well-established international business
Diverse market opportunities have grown into a well-established international business Group Globa 2004 2010 l 2007 2013 2010 USA Acquisition 2004 2010 2014 2015 2016 2018 2022 2024 Start of Significant Discovery Expansion of Significant Accelerated membership Vitality Global is split Vitality Globa
Slide 26: A single global composite
Vitality Vitality Health International Vitality UK A single global composite: Network Vitality Single Vitality chassis to establish a unified approach to personalisation across markets, enhancing customer engagement and loyalty Inter-operable technology platforms and consistent global Call-able modu
Slide 27: Strategic structures resulting in competitive advantage
Strategic structures resulting in competitive advantage Vitality Network Vitality Health Health International Life Full insurance company, Partnership model, with the Equity stakes, portfolio of centre of excellence and best insurers globally health tech and data epicentre for R&D science businesses
Slide 28: Vitality Shared-value model
Vitality UK Vitality Vitality Network Vitality Health Emile Stipp International Vitality Shared-value model 28
Slide 29: Value x Propensity
BEHAVIOUR CHANGE BEHAVIOUR REWARD PERSONALISED MECHANISMS INCENTIVES STRUCTURE COMMUNICATION Vitality Active Hyperbolic Program Personalised Incentivised 180+ Rewards & PHP discounting partners messaging engagement Vitality Dynamic Fuel Communication Money interest rates cashbacks frequency Vitality
Slide 30: Data
Data Trained on lifestyle, behavioural and clinical data, learning customer preferences and habits BEHAVIOUR CHANGE BEHAVIOUR REWARD PERSONALISED MECHANISMS INCENTIVES STRUCTURE COMMUNICATION Vitality Active Hyperbolic 180+ Program Personalised Rewards & PHP discounting partners meassaging Vitality
Slide 31: We make people healthier
Exercise makes people healthier We make people exercise WE MAKE PEOPLE HEALTHIER 31
Slide 32: Quantifying the impact of behaviour change
Quantifying the impact of behaviour change 1 2 3 Eligibility period* Treatment period Outcome period Participants Identify members who What level of increased exercise Was there a death? did no exercise did members do 502 062 Baseline mortality High Period Observe 5 years Med relative Physical activ
Slide 33: The causal effects of behaviour change are profound
The causal effects of behaviour change are profound Unadjusted mortality Isolating the impact of exercise Key insights: how exercise reduces risk Age 45-65 Age 45-65 Vitality Status 0 (base) Low Medium High (𝑡0 ) Age Duration on 0 (base) Low Medium High (𝑡0 ) Relative Mortality 0% Vitality 0%…
Slide 34: Rich data asset in Life and Health insurance
Rich data asset in Life and Health insurance Multi-dimensional data Data subsidisation Longitudinal and causal Health claims Clinical data repository Mortality Nutrition data Mental wellbeing Relative risk Vitality wellness data Demographics IH claims cost Mortality U/W data Behavioural Lapsation De
Slide 35: Vitality incentivises people to exercise
Vitality incentivises people to exercise Client count Number of steps Below reward levels, smooth Large spikes at reward levels point distribution 35
Slide 36: Dynamic Risk Assessment
Dynamic Risk Assessment Understand the member’s context through a personalised risk vector leveraging the power of the Discovery dataset, regardless of the data environment BEHAVIOUR CHANGE BEHAVIOUR REWARD PERSONALISED MECHANISMS INCENTIVES STRUCTURE COMMUNICATION Vitality Active Hyperbolic 180+ Pr
Slide 37: Personalised risk vector leveraging the Discovery dataset
Personalised risk vector leveraging the power of the Discovery dataset, regardless of the data environment Data required from different Feed data into Discovery’s risk LIFESPAN data environments algorithms Fewer, More, Fuller data dimensions HABIT HEALTHSPAN SICK SICK YEARS Personalised risk Effecti
Slide 38: Using habits to understand behaviour change
Using habits to understand behaviour change Exercise habits can be categorised based on their intensity and predictability Action • A specific, intentional, and often Is there an conscious activity or task that an event? individual engages in at a particular moment in response to a specific Weak Goo
Slide 39: The theory behind clinical habits
The theory behind clinical habits Is health-seeking behaviour predictable? Clinical habits Data shows that if someone completes an action in 3 cycles, A measure of the consistency with which clinically relevant actions are they have 80% chance of doing it again completed over a particular time-frame
Slide 40: Example of risk profiles for people who look the same on paper
Example of 2 risk profiles for people who look the same on paper Person A: Person B: Age: 54 Age: 54 Gender: Male Gender: Male Diabetic Diabetic Physically inactive Low physical activity 40
Slide 41: AI Recommender
AI Recommender Use behaviour science along with member insights on propensity and value to suggest hyper- personalised and real-time next best actions that will improve the member’s risk outcomes BEHAVIOUR CHANGE BEHAVIOUR REWARD PERSONALISED MECHANISMS INCENTIVES STRUCTURE COMMUNICATION Vitality Ac
Slide 42: Building a personalised health pathway
Building a personalised health pathway Value data science models Propensity data science models Personalised Health Pathways Sophisticated causal model to determine the Machine learning model incorporating prior Using Value and Propensity to create a contribution of each action to long-term health e
Slide 43: Ranked top next best actions differ based on value, propensity and habits
Ranked top 3 next best actions differ based on value, propensity and current habits Person A: Person B: VALUE PROPENSITY VALUE PROPENSITY 3500 steps 3x Visit Primary Care Provider Microalbuminuria Test Visit Primary Care Provider Microalbuminuria Test Prostate Exam 5000 steps 3x Random Blood Glucose
Slide 44: Incentivised engagement
Incentivised engagement Behaviour change through actuarially-matched, compelling incentives, communicated in a personalised way, manifesting as two rings, with personalised next best BEHAVIOUR CHANGE BEHAVIOUR REWARD PERSONALISED MECHANISMS INCENTIVES STRUCTURE COMMUNICATION Vitality Active Hyperbol
Slide 45: Optimisation of rewards, hurdles and communication
Optimisation of rewards, hurdles and communication ↑Reward Rewards → ↑∆ abit ↑∆habit → ↓∆𝑞𝑥 ↑ omms ↓ urdle → Communication Hurdle → ↑∆ abit ↑∆ abit ∆habit → Reward cost ≤ Value ∆habit 45
Slide 46: Optimisation of rewards, hurdles and communication
Optimisation of rewards, hurdles and communication Iteratively test, learns and Reinforcement Learning Agent adapts the actions we Leverage Learn send, how we The agent leverages known The agent experiments with communicate and how we information to maximise different approaches to refine reward bas
Slide 47: Increase in personalisation
Personal Health Pathways | Personalised Rewards A reinforcement learning model that is exportable and will drive engagement and optimise spend at an individual level Personalisation The ability to engage members Vision 0.75 Optimal reward Considerations in a manner that is Output - Rewards elasticit
Slide 48: Communication of the next best actions differ
Communication of the next best actions differ Person A: Person B: Entity / Audience profile Entity / Audience profile “…, 54, manages a chronic condition, specifically type 1 diabetes. A “…, 54, managing chronic type 1 diabetes, … moderate level of member for just under 1.5 years, …. maintains a Bro
Slide 49: How hyper-personalisation manifests for the member
How hyper-personalisation manifests for the member Person A: Person B: 49
Slide 50: Value generated
Value generated Value generated through the utilisation of iscovery’s powerful data asset and IP BEHAVIOUR CHANGE BEHAVIOUR REWARD PERSONALISED MECHANISMS INCENTIVES STRUCTURE COMMUNICATION Vitality Active Hyperbolic 180+ Program Personalised Rewards & PHP discounting partners meassaging Vitality Dy
Slide 51: Deep understanding of how mortality changes based on behaviour
Deep understanding of how mortality changes based on behaviour Up to 31% Reduction in mortality* Mortality rate 𝑞 𝑥+𝑡 𝑞 𝑥+𝑡 | 𝑦 𝑞𝑥 𝑞 𝑥+𝑡 𝑦 𝑧 𝑞𝑥|𝑦 Value generated through engagement and formation of healthy habits 𝑥 = 𝑎𝑔𝑒 Age 𝑦 = 𝑙𝑖𝑓𝑒𝑠𝑡𝑦𝑙𝑒 𝑎𝑛𝑑 𝑐𝑙𝑖𝑛𝑖𝑐𝑎𝑙…
Slide 52: Product structure and journey in Life insurance
Product structure and journey in Life insurance Personalised PayBack Boost for unhealthy, unengaged Bronze client (5th health claims band), R5000 premium, double PayBacks, 100% max Double PayBack PayBack 100% 100% 100% accumulation 10% 10% 10% 10% 10% Months Complete your Enhance your Shared Value G
Slide 53: Personalised shared value model in the context of Life insurance
Personalised shared value model in the context of Life insurance Optimises mortality & morbidity saving generated per vitality point earned Generalised Shared Value Personalised Shared Value Mortality and morbidity outcomes correspond to Every personalised action within status results in a Vitality
Slide 54: Value of Vitality Life Optimised Products: low physical activity
Value of Vitality Life Optimised Products: different activity levels Low physical activity 118 -13 22 100 59 -50 Non-Optimised Claims Lapses Optimised Dynamic Total discount premium effect 54
Slide 55: Value of Vitality Life Optimised Products: moderate physical activity
Value of Vitality Life Optimised Products: different activity levels Moderate physical activity 14 124 -50 31 100 29 Non-Optimised Claims Lapses Optimised Dynamic Total discount premium effect 55
Slide 56: Value of Vitality Life Optimised Products: high physical activity
Value of Vitality Life Optimised Products: different activity levels High physical activity 34 -50 132 10 38 100 Non-Optimised Claims Lapses Optimised Dynamic Total discount premium effect 56
Slide 57: Value of Vitality Life Optimised Products
Value of Vitality Life Optimised Products Portfolio view given likely transitions between different activity levels over and average portfolio, after hyper-personalisation and specific rewards for building habits Indicative Vitality value creation 4 119 100 20 -50 45 Non-Optimised Claims Lapses Opti
Slide 58: Incentivised Engagement
Incentivised Engagement A/B Testing Ability to Optimisation Framework. influence model Model BEHAVIOUR CHANGE BEHAVIOUR REWARD PERSONALISED MECHANISMS INCENTIVES STRUCTURE COMMUNICATION Vitality Active Hyperbolic Program Personalised Incentivised 180+ Rewards & PHP discounting partners messaging eng
Slide 59: Personal Health Pathways Components in Health
Personal Health Pathways Components in Health Personalised Actions Sustaining habits LLMs A/B Testing Step Laddering Algorithm Gym workouts V02 Max, Heart Rate Variability, Stress Levels, Physical Activity Heart Rate Sleep management Park Runs Habit Index Workouts Full Factorial A/B Testing Chronic
Slide 60: The use of LLMs & GenAI Model Gardens within Discovery
The use of LLMs & GenAI Model Gardens within Discovery Care assistant Xssistant Automating some Unique Health coach authorisation longitudinal decisions Pre-auth health rules navigation and lifestyle data Discovery Clinical knowledge LLM Writing assistant Silent IVR Enhance call routing Configurable
Slide 61: Questions
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Slide 62: Vitality Network
Vitality UK Vitality Vitality Network Vitality Health International Shaun Matisonn Vitality Network 62
Slide 63: Vision: Transforming insurance to protect, empower and create
VISION: Vitality Network is driving the global expansion of Shared Value Insurance, partnering with leading global partners to deliver IP and transform the Transforming future of insurance. Through our innovative platform, we enable insurers to deliver impactful insurance to health and financial out
Slide 64: Powerful assets which enable us to deliver on our shared-value vision
Powerful assets which enable us to deliver on our shared-value vision INSURANCE PRICING VITALITY PRODUCT Healthy Healthy Futures Vitality Product Device Dynamic Wedge Assessment Actions Ring playbook -led pricing funding Encourages completion of PRODUCT AND IP LAYER lifestyle actions Vitality Market
Slide 65: Powerful assets: dynamic pricing aligns risks and premiums
Powerful assets which enable us to deliver on our shared-value vision Dynamic pricing aligns risks and premiums, and extra value can be funneled back to clients through cashbacks INSURANCE PRICING VITALITY PRODUCT Healthy Healthy Futures Vitality Product Device Dynamic Wedge Assessment Actions Ring
Slide 66: Powerful assets: global partner network
Powerful assets which enable us to deliver on our shared-value vision We are creating a constantly-evolving global partner network leveraging our unique internal expertise and footprint INSURANCE PRICING VITALITY PRODUCT Healthy Healthy Futures Vitality Product Device Dynamic Wedge Assessment Action
Slide 67: Powerful assets: sophisticated platform
Powerful assets which enable us to deliver on our shared-value vision Our sophisticated platform allows us to effectively deliver IP across the globe, whilst maintaining a stable cost base INSURANCE PRICING VITALITY PRODUCT Healthy Healthy Futures Vitality Product Device Dynamic Wedge Assessment Act
Slide 68: The SVI model can be globalised to generate VONB uplift
The SVI model can be globalised to generate VONB uplift for insurance partners which partners and Vitality Network share in SVI model brings uplift in profit 3 4 Vitality etwork’s to partners business’ through: Revenue Model: 2 VN takes a share of the 1 Growing new business 5 revenue as a result of
Slide 69: Vitality Network's success story
Vitality etwork’s success story Engagement Actuarial dynamics Value uplift High engagement across markets Lapses Claims Higher Vitality engagement correlated with Market 1 greater up-sell and cross-sell 0% 20% 40% 60% 80% 100% -35% -60% Engaged Vitality members are >2x more likely to Market 1 repurc
Slide 70: Vitality Network financial and membership results
Vitality Network Integrated API by Insurance partners Operating profit insurance partners Revenue membership 2023- 2024: 2023- 2024: 2023- 2024: 2023- 2024: +23% +30% +11% +18% +10% +16% +17% to $28.5m to R533m to $1 575.1m to R29.7bn to $101.3m to R1.9bn to 5.3m 17% CAGR 11% CAGR 11% CAGR 31% CAGR
Slide 71: Vitality Network has access to the world's addressable life insurance markets
Vitality etwork has access to > of the world’s addressable life insurance markets with growth opportunities across all regions Gross Written Life Premium (USD million) 1 United States 714 859 2 China 390 400 A footprint in the largest and fastest growing 3 4 Japan United Kingdom 277 198 213 896 insu
Slide 72: The Vitality Network economic model is well positioned to unlock significant value
The Vitality Network economic model is well positioned to unlock significant value Growing revenue Driving revenue growth of c15% per annum through partners and penetration Evolving Shared- value to hyper- Enhancing competitiveness and new business uplift personalisation Unlocking margin growth thro
Slide 73: The Vitality Network economic model is well positioned to unlock significant value
The Vitality Network economic model is well positioned to unlock significant value Growing revenue Driving revenue growth of c15% per annum through partners and penetration Evolving Shared- value to hyper- Enhancing competitiveness and new business uplift personalisation Unlocking margin growth thro
Slide 74: SVI Revenue Engine
KEY REVENUE INPUTS DRIVERS Insurance partner New business API Integrated product lines Penetration SVI Membership REVENUE ENGINE Actuarial Data, IP, Vitality dynamics Program, Technology Performance fees Local market activity 74
Slide 75: Breakdown of gross revenue
Breakdown of gross revenue Profit margin With a diversified distribution of revenue Vitality Network has a current profit margin of 28% % contribution to revenue by region FY2020 – FY2024 FY2024 6% 120 60% 4% 101 8% 100 91 50% 87 39% 80 74 73 40% 67 69 66 60 52 58 30% 15% 26% 25% 28% 22% 24% 40 20%
Slide 76: North America
North America 1st Size Largest life insurance market globally Markets USA Canada & Partners 2.6% 3.3% Penetration Life insurance premiums Life insurance premiums in % of GDP in 2023 in % of GDP in 2023 SwissRe insurance report 2023 SwissRe insurance report 2023 76
Slide 77: Vitality in North America – Manulife and John Hancock
Vitality in North America – Manulife and John Hancock Integrated product lines Insurance partner Vitality is integrated across all JH and MLI products John Hancock and Manulife are all in on Vitality No Fully Longer.Healthier.Better Longevity Symposium: integration integrated John Hancock hosted its
Slide 78: Vitality in North America – Manulife and John Hancock
Vitality in North America – Manulife and John Hancock API Membership Penetration 2023- 2024: 2022- 2024: +26% +33% 14% 60% to $434m to R8.1bn to 205k As at September 2024 4% CAGR 18% CAGR (FY2020-FY2024) (FY2020-FY2024) 37% USD millions As at September 2024 Source: Internal JH Data 2020 2021 2022 20
Slide 79: Vitality in North America – Manulife and John Hancock
Vitality in North America – Manulife and John Hancock Actuarial dynamics Partner uptake Shared-value generated John Hancock Vitality customers are Giving members access to making healthier choices that are HealthyGear benefit and the Growing new business translating to positive health outcomes1 worl
Slide 80: Vitality in North America – growth opportunities
Vitality in North America – growth opportunities The US is the largest insurance market in the world with a diversity of business lines Integrations with current and new partners Individual Life ($13.6B, 2022) and Workplace Benefits ($8.3B, 2021) overview Growth is a function of: INDIVIDUAL LIFE WOR
Slide 81: Japan
Japan 3rd Size Largest life insurance market globally Markets Japan & Partners Penetration 6.8% Life insurance premiums in % of GDP in 2023 SwissRe insurance report 2023 Market Approx. 5% Share Since 2020 81
Slide 82: Vitality in Japan – Sumitomo Life Vitality
Vitality in Japan – Sumitomo Life Vitality Integrated product lines Partnership Vitality is integrated across most Sumitomo products Deeply entrenched valuable partnership with Sumitomo Life No Fully integration integrated Vitality Sponsorships Vitality at SLI Offices 15% off upfront Up to 30% off o
Slide 83: Vitality in Japan – Sumitomo Life Vitality
Vitality in Japan – Sumitomo Life Vitality Group annualised premiums Membership Growth projections SLI Group annualised premiums Number of SLI Vitality members (millions) Sumitomo has confirmed their (billions, yen) commitment to member well-being by pledging to expand the number of customers receiv
Slide 84: Vitality in Japan – Sumitomo Life Vitality
Vitality in Japan – Sumitomo Life Vitality Actuarial dynamics Local market activity Shared-value generated Relative mortality rates Standalone Vitality provides Growing new business 47% lower members access to a complimentary 4-week trial of Claims reduction Active Challenge – a simplified version o
Slide 85: Vitality in Japan – growth opportunities
Vitality in Japan – growth opportunities rowth will come from S I’s public commitment to achieving their 2030 target of 5 million Vitality members Achieved through: SIGNIFICANT INVESTMENT IN SVI > NEW PRODUCT LINES NEW SALES & DISTRIBUTION OPPORTUNITIES 85
Slide 86: Asia Pacific
Asia Pacific Largest Size Publicly listed pan-Asian life insurance group 3.1% Penetration Average life insurance premiums in % of GDP in 2023 (weighted by GDP) SwissRe insurance report 2023 Markets 11 markets across Southeast Asia & the Pacific • Australia • Thailand & • Singapore • South Korea Part
Slide 87: Vitality in Asia Pacific – AIA
Vitality in Asia Pacific – AIA Integrated product lines Insurance partner Vitality is integrated across a multitude of products AIA is committed to delivering on their brand promise of Healthier, Longer, Better Lives No Fully integration integrated % of Integratabale products integrated by VONB Rang
Slide 88: Vitality in Asia Pacific – AIA
Vitality in Asia Pacific – AIA ANP Membership Penetration 2023- 2024: 2023- 2024: As of 2024: +21% +27% +18% 62% to $595m to R11.13bn to 1.92m* expected membership 11.54% CAGR 13.39% CAGR Source: VN internal data (FY2020-FY2024) (FY2020-FY2024) USD millions 2020 2021 2022 2023 2024 2020 2021 2022 20
Slide 89: Vitality in Asia Pacific – AIA
Vitality in Asia Pacific – AIA Actuarial dynamics Local market activity Shared-value generated AIA Singapore offered Vitality to agents for free - providing agents with the Growing new business opportunity to engage with Vitality themselves had a significant impact Claims reduction 43% 51% Agents wi
Slide 90: Europe
Europe Size France and Germany 5th and 6th largest insurance markets globally Based on 2024 turnover 3.3% 1.8% 1.2% Penetration Average life insurance Life insurance premiums Life insurance premiums in % of GDP in 2023 premiums in % of GDP in in % of GDP in 2023 2023 (weighted by GDP) SwissRe insura
Slide 91: Vitality in Europe
Vitality in Europe Integrated product lines Insurance partner Vitality is integrated across a multitude of products Fidelidade have merged Vitality into their main core business, roadmap and marketing campaigns No Fully integration integrated Retention and engagement remains strong, while insurance
Slide 92: Vitality in Europe
Vitality in Europe Actuarial dynamics Local market activity Shared-value generated Generali Vitality Generali Austria Germany has shown introduced an incentive Growing new business notable success across in which members are a variety of indicators rewarded with a bonus to purchase a new policy. Cla
Slide 93: Vitality in Europe
Vitality in Europe API Membership Penetration 2023- 2024: 2023- 2024: Driven by poor API growth Engagement -4% in Netherlands: Generali: +15% to $9.6m +19% Range of % enrolled engaged To $89m Netherlands: -11% to $68.4m To 234K Portugal: +60% to $11.2m 56.60% CAGR 41.30%% CAGR 35% - 60% (FY2020-FY20
Slide 94: Vitality in Europe – growth opportunities
Vitality in Europe – growth opportunities Increasing penetration Generali set to re-invigorate sales with marketing and distribution activity surrounding the launch of the new app and product refresh Significant growth in Europe is projected to be unlocked through the strategic > rollout of substant
Slide 95: Latin America
Latin America Size $88bn Total insurance premiums in Latin America Up ~4% from ‘ -’ SwissRe insurance report 2023 1.0% Penetration Life insurance premiums in % of GDP in 2023 SwissRe insurance report 2023 Ecuador Brazil & Mexico Markets Argentina & Partners 95
Slide 96: Vitality in Latin America
Vitality in Latin America Integrated product lines Engagement Vitality is integrated across a multitude of products Ecuador is experiencing excellent sales and retention results, with the Apple benefit showing excellent signs of success in the last 12 months: No Fully integration integrated + 34% +
Slide 97: Greater Middle East
Greater Middle East $50bn Total insurance premiums In Greater Middle East Size Up 11% from ‘ -’ SwissRe insurance report 2023 Markets Pakistan Saudi Arabia & Partners 0.5% 0.1% Penetration Life insurance premiums Life insurance premiums in % of GDP in 2023 in % of GDP in 2023 SwissRe insurance repor
Slide 98: Vitality in Greater Middle East
Vitality in Greater Middle East Integrated product lines Local market activity Vitality is fully integrated across all product lines Introducing new rewards and product innovation No Fully integration integrated IGI Life will be partnering IGI Life Vitality awarded with Emirates to launch the Best I
Slide 99: Vitality in Greater Middle East
Vitality in Greater Middle East API Membership Penetration 2023- 2024: 2023- 2024: Vitality Embedded +25% +861% To $75.7m To 844K Registration 183% CAGR 346% CAGR Range of registered as % eligible (Sep’ ) (FY2020-FY2024) (FY2020-FY2024) In the last year: Tawuniya grown 1000% 16% - 53% from 70k to ~8
Slide 100: The Vitality Network economic model is well positioned to unlock significant value
The Vitality Network economic model is well positioned to unlock significant value Growing revenue Driving revenue growth of c15% per annum through partners and penetration Evolving Shared- value to hyper- Enhancing competitiveness and new business uplift personalisation Unlocking margin growth thro
Slide 101: The sophisticated V1 platform enables quick deployment in markets
The sophisticated V1 platform enables us to deliver product and deploy in markets quickly across multiple languages The platform architecture FIT FOR PURPOSE enables: Greater level of 1 hyperpersonalisation Leveraging cutting-edge data solutions to create member 3-month deployment into new markets s
Slide 102: The V1 platform enables delivery of IP whilst maintaining a stable cost base
The V1 is platform enables Vitality Network to deliver IP to partners whilst maintaining a stable cost base ISO 27001:2022 8 37% Certification maintained AWS Cloud Centres around Improvement in (one of the first companies the globe development productivity to get certified) 99.999% 0 Operating model
Slide 103: The V1 platform is well-positioned to unlock further growth potential
The V1 platform is well-positioned to unlock further growth potential Current models Future vision USA USA Loop AIA Core V1 Platform Reduction in sync Single code based with V1 leverages AI and sophisticated data tools to time by 92% market configurability quickly and easily configure the product in
Slide 104: The Vitality Network economic model is well positioned to unlock significant value
The Vitality Network economic model is well positioned to unlock significant value Growing revenue Driving revenue growth of c15% per annum through partners and penetration Evolving Shared- value to hyper- Enhancing competitiveness and new business uplift personalisation Unlocking margin growth thro
Slide 105: Vitality Network's expenses over the last years
Vitality etwork’s expenses over the last years Expenses over the last 5 years have increased as Business expenses are attributed to developing the Vitality went live in more markets V1 Platform and localising Vitality Vitality Network expenses ($m) Vitality Network expense breakdown per role for FY2
Slide 106: Vitality Network is well positioned to realise significant growth
Vitality Network is well positioned to realise significant growth USD m 250 Targeting revenue growth of c15% 200 150 Targeting an operating margin of 50%, as the 100 pace of revenue growth increases with limited real Stable cost base cost growth 50 0 2024 2025 2026 2027 2028 2029 106
Slide 107: Vitality Network's investment case
Vitality etwork’s investment case Traditional insurance models are inefficient because they pool controllable risk factors Discovery's Shared-value Insurance model enables differentiated pricing and risk assessment, leading to an alignment of the interests of the insurer and the customer Vitality Ne
Slide 108: Ping An Health Insurance
Vitality Vitality Network Vitality Health International Vitality UK Ping An Health Insurance David Ferreira and Candy Ding 108
Slide 109: The Chinese private healthcare industry is nascent but has strong policy support
The Chinese private healthcare industry is nascent but has strong policy support The tate Council’s new policy on insurance supervision and development opens up significant opportunities for the 25k PHI cover healthcare sector and health insurers Private hospitals 1 Under-developed private provider
Slide 110: Healthcare demand in China is growing
Healthcare demand in China is growing Healthcare increasingly Demand-side factors driving Evolving opportunities for important to Chinese economy increase in healthcare utilisation private-public collaboration Healthcare expenditure1 Aging population 1 Supplementary private health cover (% of GDP) P
Slide 111: Prospects of China's healthcare industry remain positive
Prospects of China’s healthcare industry remain positive Healthcare spending expected to Growing contribution from PAHI consistently growing grow as population ages Private Health Insurance1 market share hina’s Total ealthcare Expenditure (T E) Healthcare expenditure split under moderate Revenue gro
Slide 112: For 14 years, Discovery has partnered with PAHI to build a leading specialist health insurer
For 14 years, Discovery has successfully partnered with PAHI to build a leading specialist health insurer Transfer Build Partner B2B Collaboration 2010 2015 2020 2023 Establish brand & operational Aggressive market penetration with Customer value through services, Enhanced product offering through c
Slide 113: Building industry-defining capabilities
Building industry-defining capabilities Industry-leading medical and Superior product features compared to health and wellness services competitors Competitor 1 Competitor 2 Competitor 3 • Industry-first healthcare Comprehensive Wellness information system (HIS) for Programs hospital treatment recor
Slide 114: Diversifying and growing PAHI's distribution network
Diversifying and growing PAHI’s distribution network while maintaining superior operational performance Present in China’s main Growing alternative distribution Superior operational economic hubs channels performance Population of provinces where PAHI is present (m) Using A I’s own proprietary chann
Slide 115: PAHI is of considerable scale and is growing rapidly
PAHI is of considerable scale and is growing rapidly R5.4bn in operating R58.6bn written profit1, 2 Over 27 million lives premiums2 Growing net asset value PAHI operating results pre-tax Lives (m) Written premiums (RMB m)1 Net asset value (RMB m) (RMB m) PAHI licence Reinsurance 25,000 12,000 2,500
Slide 116: PAHI's market position has improved significantly in the past years
PAHI’s market position has improved significantly in the past years Market share1 2020 2021 2022 2023 9.9% 10.4% 10.6% 10.8% Industry ranking by premium 2020 2021 2022 2023 52/163, top 35% 49/161, top 35% 45/158, top 30% 44/160, top 30% Industry ranking by net profit 2020 2021 2022 2023 33/163, top
Slide 117: Ping An Health Insurance ambition
Ping An Health Insurance ambition ing An ealth Insurance’s vision is to be China’s leading health and wellness-driven specialist health insurer. Lead in revenue and market Discovery is committed to enabling Ping An Health Insurance to achieve this by empowering the Shared-value Insurance model 1 gro
Slide 118: The investment case for Ping An Health Insurance
The investment case for Ping An Health Insurance China remains one of the fastest growing major economies in the world, expected to grow at 4.8% in 20241, with its GDP being the second largest in the world2. hina’s ageing population and strong policy support are expected to drive significant growth
Slide 119: Vitality Health International
Vitality Vitality Network Vitality Health International Vitality UK Vitality Health International Jonathan Broomberg 119
Slide 120: Challenges across global health insurance markets provide major opportunities
Challenges across global health insurance markets provide major opportunities China >75% US 2.4tn USA of urban population Expected healthcare middle class industry size by 2030 ~7-8% 129m 10m p.a. 114m estimated medical of population have 1+ inflation for 2025 major chronic condition Growth rate of
Slide 121: Discovery's tech and data science assets across the health insurance value chain
Discovery's tech and data science assets across the health insurance value chain highly suited to address challenges in in these key markets Acquisition and Dynamic risk Personalised Value-based care Claims and retention underwriting assessment engagement Personalised Next Best Price Personalised Pe
Slide 122: Amplify Health
ijl amplifyhealth
Slide 123: The APAC health insurance market is evolving rapidly but real challenges remain
The APAC health insurance market is evolving rapidly but real challenges remain The Asia-Pacific health insurance market Critical challenges in the market persist is rapidly evolving Unfamiliar tools / lack of expertise Nascent but growing specialised health insurance Paper-based Rapid expertise acr
Slide 124: The Amplify Health JV combines Discovery and AIA's strengths
The Amplify Health JV combines Discovery and AIA’s distinctive and complementary strengths 75% 25% Capital investment No capital investment Leading brand Leverage Health & Vitality IP, data and expertise Large distribution network Phase 1 (2022-2024) Phase 2 (2024 onwards) Early deployment Deploymen
Slide 125: Strategy is to commercialise assets for use across Asia Pacific
Strategy is to commercialise assets for use across Asia Pacific - within and outside of AIA Public/private payors and Consumers • Access to the right providers at the corporates right cost • Better insurance products using cutting- • Improved health through health and edge data analytics wellness pr
Slide 126: Substantial market opportunity
Substantial market opportunity Huge opportunity Urgent need >$4 trillion 34% out-of-pocket Asia is a Annual healthcare expenditure Of total healthcare across AIA markets in 2030E expenditure material and 34% fast-growing >10% p.a. 4,2 health market 1,4 11% 15% 2020 2030E US EU Asia Profitable at sca
Slide 127: Amplify Health provides health tech and analytics to AIA's health insurance businesses
Amplify Health plays a key role in providing health tech and analytics to AIA’s health insurance businesses across Asia Amplify Health underpins the 3 pillars of AIA Amplify Health has deployed 6 tech solutions roup’s Integrated Health trategy* to 6 Asia-Pacific AIA markets *Launched in August 2022
Slide 128: Amplify Health has access to Discovery's full health insurance tech stack and IP
Amplify Health has access to Discovery's full health insurance tech stack and IP AIA owned health Third parties providers Pharma Healthcare providers Public/private players Symptom Patient Electronic Integrated Electronic Nutrition & checker & Virtual coaching scripts & patient Medicine health weigh
Slide 129: Amplify Health has made significant progress in commercialising solutions
Amplify Health has made significant progress in developing and commercialising health tech and data analytic solutions Digital Health Chronic disease Business solutions Engagement management Advisory Managed services Payment Smart Claims Integrity Private AI-driven decision engine Advanced FWA decis
Slide 130: Standardised solutions addressing key health insurer needs
Standardised solutions addressing key health insurer needs 130
Slide 131: Provider Management Solution
Provider Management Solution – using data analytics to empower health insurers to manage hospital claims costs 1. Identify provider issues 2. Engage with hospitals Determine size of savings potential in provider Design and implement strategies like innovative space, who to prioritise engaging with,
Slide 132: Multiple analytics tools and dashboards to guide provider management strategies
Multiple analytics tools and dashboards to guide provider management strategies Hospital efficiency profiles Day surgery opportunities • Which are the most and least • Which procedures are already cost-efficient hospitals? being done and which show • What is driving the cost opportunity to shift? ex
Slide 133: Illustrated claims impact of Provider Management Solution
Example | Illustrated claims impact of Provider Management Solution Steer to a preferred network 7-10% lower claims of less expensive hospitals expected from newly created network Negotiate better rates with 10-15% reduction more expensive hospitals in fees negotiated with largest hospitals 7-10% lo
Slide 134: USA
USA 134
Slide 135: Vitality US: a leading wellness engagement platform for employers
Vitality US: A leading wellness engagement platform delivering market-leading outcomes for employers Engagement Business outcomes Covers >500 employers, with 4% reduction in claims costs 1.4m employees 4.4% increase in productive 63% of active users compared USA days per employee per year to the ind
Slide 136: Significant consolidation and investments by key competitors
Significant consolidation and investments by key competitors - offering much broader digital health solutions Core Natural Adjacencies Wellness Care Chronic Virtual Consumer Medical Medically Benefits Care Condition Engagement Coaching Experience Records Informed Navigation Navigation Mgt Enablement
Slide 137: Total addressable market for integrated digital health and care exceeds $100bn
Total addressable market for integrated digital health and care exceeds $100bn Estimated TAM Supporting data Representative names Wellness $3.4bn Navigation & Advocacy $24bn Condition Management $126bn Digital Therapeutics w/ Integrated coaching • Comprised of PMPM access fee and visit fees, which v
Slide 138: Vitality US investing in expanding its product offering
Vitality US actively investing in expanding its product offering by extending into natural adjacencies and expanding target market to include health plans Member Benefit Care Condition Care Virtual Enrollment Onboarding Wellness Coaching management medical care Claims service navigation navigation m
Slide 139: Rich stack of data and tech assets powering Vitality 3.0 platform
Rich stack of data and tech assets powering Vitality 3.0 platform USA Dynamic Employer Rewards Active Earn Apple Vitality contribution incentive mall rewards Watch squares REWARDS MECHANISMS manager plan HEALTH & WELLNESS PARTNERSHIPS Personalised Condition Screenings Integrated In-network Risk stra
Slide 140: Future expansion to Personal Health Pathways – launching Q1 2025
Future expansion to Personal Health Pathways – launching Q1 2025 Applicable use cases and additional revenue streams Lifestyle coaching Individual and group coaching to best support long-term behaviour change in pursuit of an individually defined health outcome a/or lifestyle goal Chronic condition
Slide 141: Deepening and personalising integrated wellness and care offering
Deepening and personalising integrated wellness and care offering through Personal Health Pathways with Integrated Coaching Demo BRONZE STATUS 2800 POINTS Physical activity weekly Simple user-experience target Completing personalised Next Best Hello, Mary Actions closes rings Mon. May 9 – Sun. May 1
Slide 142: Quantium Health
© quantium Health
Slide 143: Quantium Health specialises in advanced analytics to improve patient outcomes
Quantium Health specialises in using advanced analytics to improve patient outcomes and healthcare systems • Global leader in data science and AI • Global network of insurance & with 20+ years of experience wellness businesses • 1,200+ people with 800+ data • Leaders in clinical analytics, scientist
Slide 144: Quantium Health has developed the Vit.AI platform
Quantium Health has developed the Vit.AI platform which enables hyper-personalised, real-time recommendations powered by ML Vit.AI Platform Feature Model Streamlined DATA SCIENCE ML ops Reporting store curation With a global resourcing model, data and data science ACCELERATORS Rules Model Metrics to
Slide 145: Questions
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Slide 146: Vitality UK
Vitality UK Vitality Vitality Network Vitality Health International Neville Koopowitz Vitality UK 146
Slide 147: Vitality UK has built a business of significant value and scale
Vitality UK has built a business of significant value and scale Strong growth and robust Embedded Value of nearly Placing Vitality UK in the financial health £1.2bn2 FTSE2503 +52% 6,000 1.9m 1,198 lives covered today1 1,139 5,000 1,021 £200m New business p.a.2 4,000 Market cap (£m) 790 3,000 A 2,000
Slide 148: Our ambition is to be the UK's leading next generation insurer
Our ambition is to be the UK’s leading next generation insurer, pioneering a new category of insurance “ hared Value Insurance” We unlock and share value from positive behaviour change – making members healthier through personalisation, providing better and more competitive products with superior fi
Slide 149: A powerful set of assets that enable sustainable competitive advantages
A powerful set of assets that enable sustainable competitive advantages Vitality UK Health Life Optimiser Active Rewards Insurance ABC pricing Reward Partner integration Employer Cashback mechanisms Status Rewards Network Ambassadors Sponsorship portfolio Football Cricket Netball Running Media Iconi
Slide 150: A strong, unified and aspirational brand
A strong, unified and aspirational brand High brand awareness Award-winning brand campaigns 307% Growth since 2014 1 Winner – Financial Services (Other finalists included: Barclays, HSBC, Lloyds Bank, Scottish Widows, 59 59 60 61 61 60 59 59 58 59 Starling Bank) 56 55 57 56 57 55 57 55 56 54 57 53 5
Slide 151: Diversified distribution with clear strategies to grow across key segments
Diversified distribution with clear strategies to grow across key profitable segments VitalityHealth Sales VitalityLife Sales Adviser footprint growth Vitality Adviser CQA Servicing VitalityLife Supporting advisers1 Specialist Type II Distribution 3,500 Expansions Digital Business 3,000 Consultants
Slide 152: Comprehensive dataset and advanced data science capabilities
Comprehensive dataset and advanced data science capabilities Economic value = Configurable f (Claims, Premiums, per market Persistency) Incentivised Engagement A/B Testing Framework. Ability to influence model Optimisation Model 5.9m Vitality benefit uses p.a. V.AI Recommender >94m Propensity Reward
Slide 153: The UK market is evolving and presents significant opportunities
The UK market is evolving, and despite its complexity presents significant opportunities going forward Small PMI market growing due to Large, commoditised life insurance market, challenges in NHS stabilising with opportunities for growth UK Life insurance market is 4th largest globally Majority of p
Slide 154: Vitality UK is financially independent and expected to generate surplus cash from FY2027
Vitality UK is financially independent and is expected to generate surplus cash from FY2027 onward Vitality UK financing model Discovery Scale of UK business means Discovery support (debt and equity) no longer required VLL new business funded by VHL is cash generative with in-force cashflows and new
Slide 155: VitalityHealth
VitalityHealth 155
Slide 156: Challenges in the NHS are driving increased utilisation and costs of private healthcare
Challenges in the NHS are driving increased utilisation and costs of private healthcare, placing pressure on PMI providers The Darzi Review1 Demand driven by NHS backlogs Key findings with relevance to VitalityHealth: NHS waiting list2 and authorisations YoY change Doctor • Surge in multiple long-te
Slide 157: Value chain in VitalityHealth
Value chain in VitalityHealth TRADITIONAL CLAIMS AND UNDERWRITING PREMIUMS VALUE CHAIN EXITS HEALTH Behavioural Risk Acquisition, Pricing Value-Based Claims and VALUE CHAIN Management and and Underwriting Care Exits Shared-Value Sophisticated pricing Personalised health Value-based Sophisticated cla
Slide 158: Market-wide pricing action taken; retention holding strong
Market-wide pricing action has been taken to reflect this new claims environment, with VitalityHealth’s retention holding strong Market response Robust retention Lag effect Other providers impacted similarly by claims VitalityHealth retention rates remained strong Lag between increases and premiums
Slide 159: Sophisticated pricing capabilities utilise unique data
VitalityHealth’s sophisticated pricing capabilities utilises unique data to optimise for competitiveness and profitability Significant data advantage Balance volume and profitability Personalised input Set based on product, coverage, and risk We optimise for Standard rating factors Model lifetime va
Slide 160: The Vitality Programme drives significant behaviour change
The Vitality Programme drives significant behaviour change and unlocks superior actuarial outcomes Digitally engaged members Getting healthier Earning rewards Claims costs £125m -38% earned by members through rewards 500k health assessments and integrated premiums 850K total app users c.1m Cinema ti
Slide 161: VitalityHealth's market-leading healthcare assets drive superior member outcomes
VitalityHealth’s market-leading healthcare assets drive superior member outcomes and help manage downstream costs Everyday Care Care Hub Provider networks Vitality GP Physiotherapy Talking therapies Optical, Dental and Hearing Everyday Care reduces serious claims Increasing digital navigation Higher
Slide 162: VitalityHealth has a clear growth strategy and strong distribution network
VitalityHealth has a clear growth strategy and strong distribution network for profitable growth in this non-homogenous market SME market has the lowest claims ratios and high persistency Claims ratios SME Market growth 2021 2022 2023 Individual SME Corporate Individual Vitality over-indexes on SME,
Slide 163: A 7.5% operating margin is achievable
A 7.5% operating margin is achievable in this environment, with strong evidence to support VitalityHealth’s ability to deliver this Strong retention rates Digital capabilities driving Lower benefit ratios operational efficiencies Calls per claim Benefit Ratios (Claims + Vitality cost)1 Lapse rates b
Slide 164: The investment case for VitalityHealth
The investment case for VitalityHealth The demand for PMI is growing driven by challenges in the NHS, heightened awareness of health and wellbeing, and increased focus on employee health. VitalityHealth has successfully re-based its pricing, and its retention has remained strong despite this, owing
Slide 165: VitalityLife
VitalityLife Justin Taurog 165
Slide 166: Value chain in VitalityLife
Value chain in VitalityLife TRADITIONAL CLAIMS AND UNDERWRITING PREMIUMS VALUE CHAIN EXITS LIFE Behavioural Risk Acquisition, Pricing Dynamic Claims and VALUE CHAIN Management and and Underwriting Pricing Retention Shared-Value Sophisticated pricing Personalised risk Premiums that reflect Positive s
Slide 167: Distribution dynamics have changed significantly
Distribution dynamics have changed significantly 98% of advisers recommend products through portals 50% written as multi-benefit Market is increasingly price-driven with advisers using portals to generate quotes. In-portal Multi-benefit business becoming increasingly opportunity to up-sell term life
Slide 168: Optimiser enhances our competitiveness on portals
Optimiser enhances our competitiveness on portals and delivers greater value to members and VitalityLife Greater take-up of additional Drives top ranking on portals benefits Generating superior value Optimiser allows us to compete on portals Customers use the upfront discount to Optimiser drives gre
Slide 169: VitalityLife's shared-value dynamics unlock superior returns
VitalityLife’s shared-value dynamics place it in a strong position to unlock superior returns in a commoditised market Optimiser upfront discount Dynamic premium Shared-value valuation Mortality, morbidity and in combination with increases in combination model and reinsurance lapse experience advanc
Slide 170: Combining Optimiser with sophisticated pricing
Combining Optimiser with sophisticated pricing allows VitalityLife to optimise for volume and value, maximising portal opportunity Advanced price optimisation Launched February, resulting in ‘tale of two halves’ Significant improvements to sophistication and speed of pricing allow High growth H2 on
Slide 171: New business value generation is the key measure going forward
New business value generation is the key measure going forward New business value generation = (New Business Volumes * Marginal Profit Factor) Less Fixed Initial Expenses New Business Volumes * Marginal Profit Factor Fixed Initial Expenses Product and distribution assets unlock greater value by incr
Slide 172: CSM and RA margin growth is the engine for earnings growth
CSM and RA margin growth is the engine for earnings growth, and VitalityLife is growing this successfully CSM and RA growth dynamics H2 trajectory has continued into FY2025 New business net value is critical for growing the CSM and RA balance Through price optimisation and disciplined management of
Slide 173: Financing requirements for VitalityLife
Financing requirements for VitalityLife have been typical of a young UK life insurer, and it is now financially independent, requiring no capital from Discovery 1 Jan 2016* VitalityLife becomes cashflow positive from FY2028 Investment phase to build scale June 2021 Self-financing Gross operating cas
Slide 174: The investment case for VitalityLife
The investment case for VitalityLife The UK life insurance market is large (~£65bn), and the stabilising economic outlook and exit of several competitors are creating opportunities for growth. While the market is becoming increasingly commoditised, Vitality ife’s Optimiser in combination with its so
Slide 175: Questions
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Slide 176: Presentation disclaimer
Presentation disclaimer This presentation may contain forward looking statements with respect to certain of iscovery’s plans and its current goals and expectations relating to its future performance and results. All forward looking statements involve risk and uncertainty because they relate to futur
Slide 177: Discovery Capital Markets Day
Discovery Capital Markets Day November 2024