Discovery Limited · JSE:DSY
Discovery — Investor Presentation (June 2019)
26 slides from Discovery's investor presentation, Jun 4, 2019
Slide 1: VitalityInvest
VitalityInvest 4 June 2019 1
Slide 2: World's largest behavioural platform linked to financial services
>= Sk o— zr / SA COMPOSITE MODEL UK COMPOSITE MODEL PARTNER COMPOSITE MODEL rN GENERAL a < 9 rs a {e BE @ oo 1 Manulife 3 > suurouo uFE s na ( WORLD'S LARGEST BEHAVIOURAL PLATFORM LINKED TO FINANCIAL SERVICES S®OzOQOQOSHHESHSESOS# OOF? Positively different investments.
Slide 3: Vitality is the largest behavioural platform in the world
Vitality is the largest behavioural platform in the world Impacting an Partnering with Paving the way increasing number of leading international through intellectual lives globally insurers leadership 19 markets 17.8m lives Pledge Successful launch into Japanese and South Korean markets 100m 20% by
Slide 4: Extending the Vitality platform to investments
Extending the Vitality platform to investments 4
Slide 5: The challenges facing the investment market
The challenges facing the investment market 1 People are living longer 2 People are not saving enough in today’s environment 3 Existing products are not addressing the issues in society today How do we live healthier and fund a longer retirement? 5
Slide 6: Opportunity presented by the UK investment market
Opportunity presented by the UK investment market • Personal pensions • Generalist £180bn • Stocks & Shares ISAs • Wealth specialist • Junior ISAs • Protection specialist • High net worth • Large FA • Pensions consolidator £42bn £29bn £13bn Total market Our contestable market Key segments (4,396 fir
Slide 7: Increased distribution footprint
Increased distribution footprint Expanded distribution support New initiatives to support VitalityInvest 6 Invest Specialists and Technical experts Over 200 UK-wide Business • Help with complexities of legislation, Consultants tax rules, trusts, pension transfers and crystallisation events • Largest
Slide 8: The rationale for VitalityInvest
The rationale for VitalityInvest 8
Slide 9: Key trends shaping the agenda on long term savings and retirement
Key trends shaping the agenda on long term savings and retirement Increased choice Increased sophistication Reduced costs Authorised funds Fund innovation Asset weighted expense ratios 3,458 Increased use of DFM Risk 2010s profiled 2010s funds Rise of passive investing Hedge funds and absolute 2000s
Slide 10: Key trends: increasing life expectancy
Key trends shaping the agenda on long term savings and retirement Increasing life expectancy Increasing life expectancy Increasing years spent in from birth in retirement poor health 80 +4 Years 19 +2.5 Years 16.5 +0.2 Years from 2003 from 2003 added every year 18.5 79 16 18 78 17.5 15.5 77 17 16.5
Slide 11: Key trends: shift from DB to DC and lower savings
Key trends shaping the agenda on long term savings and retirement Shifts from DB to DC Significantly lower savings schemes into DC schemes Active membership of private Average contribution rates sector occupational pension 25 by scheme type Total contributions - % of salary schemes 10 20 Millions 8
Slide 12: Key trends: technology and personalisation
Key trends shaping the agenda on long term savings and retirement Technology is driving Yet, financial planning tools still take a blunt increasing personalisation approach to incorporating life expectancy Recommendatio Smart voice assistants n algorithms Targeted advertising Wearable devices Techno
Slide 13: A behavioural platform to incentivise positive health and savings behaviours
A behavioural platform to incentivise positive health and savings behaviours UP TO AS LOW AS UP TO 15% ZERO 50% BOOST CHARGE BOOST BEHAVIOURAL SAVE SOONER, MANAGE HEALTH STAY WELLNESS MORE AND FOR AND WEALTH IN PLATFORM HEALTHY LONGER RETIREMENT 13 13
Slide 14: The Investment Booster – Save sooner, more and for longer
The Investment Booster – Save sooner, more and for longer Get a boost of up to 15% to your savings, including growth, at no extra cost Years Boost Cumulative boosts • Receive a boost to money invested in Vitality funds, every 5 years 5 2% 2% • Boosts compound over time 10 2.5% 4.5% • Future contribu
Slide 15: The Healthy Living Discount – Stay healthy
The Healthy Living Discount – Stay healthy Get a product charge of zero if you take care of your health Charge structure • Pay a discounted product Investment No Vitality Bronze Silver Gold Platinum charge, based on Vitality status, for money invested in <£30k 0.5% 0.5% 0.4% 0.25% 0% Vitality funds
Slide 16: The Retirement Booster – Manage health and wealth in retirement
The Retirement Booster – Manage health and wealth in retirement Get a boost of up to 50% of income drawn, based on Vitality status and level of drawdown Boost as proportion of income taken Withdrawal prior year • Annual boost based on amount of income Bronze Silver Gold Platinum draw down and Vitali
Slide 17: Combined benefits can extend retirement income by over 10 years
Combined these unique benefits can extend your retirement income by over 10 years Vitality status Additional years’ income £600k Boosted fund from Investment Booster and Healthy Living Discount No Vitality 0 years Bronze 4 years £500k Silver 5 years Gold 7 years £400k Platinum 12 years Longer lastin
Slide 18: A sophisticated product construct underpinned by technology and asset managers
A sophisticated product construct underpinned by technology and leading asset managers UP TO AS LOW AS UP TO 15% ZERO 50% BOOST CHARGE BOOST BEHAVIOURAL MANAGE SAVE SOONER, MORE STAY WELLNESS HEALTH AND WEALTH AND FOR LONGER HEALTHY PLATFORM IN RETIREMENT PRODUCTS S&S ISA JUNIOR ISA RETIREMENT PLAN
Slide 19: Our Vitality Risk Optimiser funds – An industry leading range
Our Vitality Risk Optimiser funds – An industry leading range of risk-targeted funds Dynamic Planner gold standard rated funds Spans risk Risk-targeting verified by Dynamic Planner as meeting their requirements for gold standard funds levels 3 to 7 Adviser peace of mind Constant risk-targeting means
Slide 20: 5-year performance of VIRO funds against IA peer group
5-year performance of VIRO funds against IA peer group VIRO5 vs. Mixed Investment 20-60% shares VIRO6 vs. Mixed Investment 40-85% shares £1,550 £1,650 £1,450 £1,550 Risk Optimiser Risk Optimiser simulated past performance* £1,450 simulated past performance* £1,350 £1,350 £1,250 £1,250 £1,150 £1,150
Slide 21: Our Vitality Performer funds – actively managed by Investec Asset Management
Our Vitality Performer funds – actively managed by Investec Asset Management Investec Asset Management: Strong track-record Practical manifestation of this approach built around core strategies and solutions UK Listed Equity Growth Fund Ability to outperform 100% (Cumulative performance over 6 years
Slide 22: Third Party Fund Range
Third Party Fund Range A range of third party funds from leading fund managers, including active and passive funds “Vanguard” is a trade mark of The Vanguard Group, Inc., and has been licensed for use by Vitality Life Limited. 22
Slide 23: Market-first financial planning tools with personalised life expectancy algorithm
Market-first financial planning tools that incorporate personalised life expectancy algorithm, developed in collaboration with University of Cambridge and RAND Europe Case study: 35-year old male 23
Slide 24: First-to-market financial planning tools incorporating individualised life expectancy
First-to-market financial planning tools that incorporate individualised life expectancy HOW LONG SHOULD YOU PLAN FOR? HOW YOU CAN MAKE A POSITIVE DIFFERENCE TO YOUR LIFE? ARE YOU SAVING ENOUGH? HOW VITALITYINVEST CAN HELP CLOSE THE GAP? 24
Slide 25: First-to-market financial planning tools for advisers
First-to-market financial planning tools for advisers that incorporate individualised life expectancy DETAILED CASH FLOW ANALYSES ‘WHAT IF’ SCENARIO PLANNING PERSONALISED LIFE EXPECTANCY 25
Slide 26: Positively different investments.
Positively different investments. 26