Discovery Health, South Africa’s biggest health insurer, has posted a R3.4 billion operating profit and said it saw strong new business growth across all its businesses of 24% to R9.3 billion. Normalised headline earnings increased 14% to R2 316 million.
The company said the performance was ‘exceptional’ when viewed against the key metrics of new business growth (10%), the lowest industry lapse rate at 3.9%, high reserve levels and excellent credit rating – all resulting in normalised operating profit up 10% to R1 499 million. It added that the membership was still stable, with 98% of members choosing to remain on the same plan or upgrading their plan.
Discovery’s chief executive officer, Adrian Gore, said: “Our vision is to build a world-leading health insurance capability that enables us to provide best-in-industry products and services to our clients. To achieve this, Discovery Health’s role is to balance the competing needs and objectives of maximising access for members and enhancing the quality of care, while also lowering the costs of healthcare. I believe we are delivering on these objectives as is evident by the fact that Discovery Health options are 10-30% cheaper than market average with richer benefits.”
More beneficiaries, fewer schemes
While South Africa’s biggest health insurer posts profits some of its peers are struggling or even going bust. Discovery’s results come after the Council of Medical Schemes (CMS) issued its annual report for 2011-2012. The CMS said there are now fewer medical schemes than there were before but more beneficiaries. At the end of 2011, there were 97 medical schemes registered in South Africa, compared to 100 schemes at the end of 2010 and 144 in the year 2000.
The reduction in schemes is the result of consolidations, amalgamations and liquidations (voluntary and involuntary). The CMS said the trend is likely to continue but that the medical industry is far from being an oligopoly.
Meanwhile the number of beneficiaries is on the increase. In 2011, the number of principal members increased by 3.3% to 3 730 565 and dependents increased by 2% to 4 795844, resulting in the total number of beneficiaries increasing by 2.5% to a total of 8 526 409.