(Bloomberg) -- Discovery Ltd. said a surge in new business and smaller losses at its fledgling banking unit in South Africa boosted full-year profit for the nation’s biggest insurer by 12%.
Profit climbed to 7.28 billion rand ($417 million) from a year earlier, while new business rose 18% to 26.7 billion rand, the Johannesburg company that is the country’s largest health-insurance administrator said in a statement Thursday.
It will pay a final dividend of 1.52 rand, taking the total payout for the year to 2.17 rand.
Besides its insurance offerings that span South Africa, the United Kingdom and China, the company’s businesses include Vitality — a rewards program linked to whether clients keep fit, eat healthily, save funds and drive carefully — and an online bank. Discovery plans to arrange its operations into “two distinct composites to drive the new phase of growth,” it said.
Discovery started a digital lender in 2019, joining a rush into South African banking that includes an initiative from insurer Old Mutual Ltd. — set to launch this year — to a digital-only offering backed by China’s Tencent Holdings Ltd. known as TymeBank.
Discovery Bank’s number of clients grew 36% to 958,055 in the period while the operation’s loss narrowed. The lender will seek to break even this year.
Besides contending with pressure on its clients owing to interest-rate increases in its key markets, Discovery is operating amid South Africa’s plans to roll out universal national health insurance, which the company says is “not workable in its current form.”
President Cyril Ramaphosa, who signed the NHI Act into law less than two weeks before May 29 elections after years of wrangling, has asked South Africa’s biggest business-lobby group to suggest solutions to address its concerns with the legislation, which Business Unity South Africa has previously described as unafforable and unconstitutional.
The legislation bans the private sector from offering cover for treatment available under the NHI, and opponents say it will neither remedy the health-care system’s shortfalls or be affordable for the state.
“The group is engaging at multiple levels to facilitate a viable journey to universal health-care coverage,” Discovery said.
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