Discovery Limited · JSE:DSY
Discovery — Corporate Update (February 2021)
17 slides from Discovery's corporate update, February 2021
Slide 1: Health Update
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Slide 2: Continued pressure on open medical schemes during 2019
CONTINUED PRESSURE ON OPEN MEDICAL SCHEMES DURING 2019 Declining membership in a xxx industry Large schemes are growing at the expense of smaller schemes Medical scheme beneficiaries (million) Consistent contraction of smaller medical schemes (2012 – 2019) Percentage growth in beneficiaries (%) 2017
Slide 3: Competitor schemes continue to trade off sustainability and underpricing for growth
COMPETITOR SCHEMES CONTINUE TO TRADE OFF SUSTAINABILITY AND UNDERPRICING FOR GROWTH Only 4 Schemes in the open medical Declining operating results due to Declining solvency due to sustained schemes industry experienced growth underpricing for growth operating losses in 2019 Beneficiaries by Open Med
Slide 4: 2019 | Discovery Health Medical Scheme is an outlier in the open medical scheme industry
2019 |DISCOVERY HEALTH MEDICAL SCHEME IS AN OUTLIER IN THE OPEN MEDICAL SCHEME INDUSTRY Membership Operating Results Solvency Net new members Market share Net new Solvency Reserves Net healthcare result (2019) lives R 1,500 110% R 968.0 R 1,000 105% R 507.0 46.2% 45.5% 44.8% 44.0% 43.3% 43.1% R 500
Slide 5: 2020 | Continued market share growth despite a volatile environment
2020 | CONTINED MARKET SHARE GROWTH DESPITE A VOLATILE ENVIRONMENT Lower levels of new growth offset by Growth impacted by contraction Membership & Growth lower levels of withdrawals in employment Total new lives and withdrawls DHMS new business API by business type (2019 – 2020) Type I: new employe
Slide 6: Flight to quality | Healthy membership dynamics in 2020
FLIGHT TO QUALITY | HEALTHY MEMBERSHIP DYNAMICS IN 2020 New joiners maintain healthy scheme profile Improved plan stability over 2020 Plan movements stability Existing lives New lives 2020 plan movements Upgrade 2.2% 1.6% Average age Average age Downgrade 96.2% No movement Chronic ratio Chronic rati
Slide 7: Health Update
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Slide 8: Marked change in health seeking behavior
MARKED CHANGE IN HEALTH SEEKING BEHAVIOR Increased demand for healthcare to manage COVID-19 Offset by a lower non-COVID-19 health-seeking behaviour pandemic New demand for COVID-19 healthcare Lower in-hospital admissions 500 Total admissions Medical admissions Surgical admissions 450 COVID-19 admiss
Slide 9: In 2021 DHMS is well-placed to manage the sustained impact of COVID-19 costs going forward
IN 2021 DHMS IS WELL-PLACED TO MANAGE THE SUSTAINED IMPACT OF COVID-19 COSTS GOING FORWARD Net healthcare result Security and surplus Long-term expected costs of COVID-19 Higher ongoing healthcare funding credit rating demand due to: DHMS unaudited net healthcare unaudited solvency result 2020 Surpl
Slide 10: Health Update
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Slide 11: SA second wave more severe than the first wave - fortunately rapidly decreasing
SA SECOND WAVE MORE SEVERE THAN THE FIRST WAVE - FORTUNATELY RAPIDLY DECREASING SA’s second wave more serious than first, and started in Comparison between waves using Discovery data holiday season South Africa daily new infection trends More infections 25,000 600 Average daily new infections Averag
Slide 12: Increased mobility, super-spreader events and new variant main contributors to the second wave
INCREASED MOBILITY, SUPER-SPREADER EVENTS AND NEW VARIANT MAIN CONTRIBUTORS TO THE SECOND WAVE Spike in young infections post-matric Mobility increased early December COVID-19 variant 40-50% more celebratory events and spread to other as SA entered holiday season transmissible members Google mobilit
Slide 13: Third wave likely – extent and impact depends on a number of factors
THIRD WAVE LIKELY – EXTENT AND IMPACT DEPENDS ON A NUMBER OF FACTORS Projected deaths vs Incremental deaths under the medium scenario Total second wave deaths expecte Scenarios assume IFR = 0.39% and 1/3 reinfection Feb-Jun Jul-Dec d deaths 2,000 1,800 1,600 Second wave run-off 0.2x 0x 16.6k 1,400 1
Slide 14: Health Update
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Slide 15: 40-50M doses of vaccine required for SA; 18-20M doses to complete Phase 1 and Phase 2
40-50M DOSES OF VACCINE REQUIRED FOR SA; 18-20M DOSES TO COMPLETE PHASE 1 AND PHASE 2 Phase I Phase II Phase III Total Health care workers (HCW) Essential workers Other persons >18 years Target population: 1,250,000 Target population: 22,500,000 All health sector workers Target population: 1,250,000
Slide 16: Understanding immunity | Strong data indicating efficacy of vaccines on all dimensions | Israel case study
UNDERSTANDING IMMUNITY | STRONG DATA INDICATING EFFICACY OF VACCINES ON ALL DIMENSIONS | ISRAEL CASE SUDY Reduction in infection and symptomatic COVID cases Reduction in morbidity Reduction in mortality Documented COVID-19 infection COVID-19 Hospitalisations Death due to COVID-19 Unvaccinated Vaccin
Slide 17: Health Update
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