Johannesburg - JSE-listed Discovery said on Thursday that its shared-value insurance business model and its organic growth strategy had paid dividends, driving its profit to R3.4 billion for the six months to December.
Chief executive, Adrian Gore, said the efficacy its vitality shared-value insurance provided the company with a good growth area.
“A combination of three main drivers contributed to our robust performance: our vitality shared-value insurance model being employed across 14 markets, our organic approach to growth and our sophisticated capital management philosophy,” Gore said.
The group said its vitality shared-value insurance had been employed across 14 markets, with the company accessing more than 65 percent of the global life insurance by premium. Headline earnings rose 14 percent to R2 billion, while normalised earnings increased by 3 percent to R2.1 billion.
The group’s normalised operating profit from operations increased by 13 percent to R3.4 billion for the period while its new business growth shot up 15 percent to R8.2 billion.
The uptick in profits might see another windfall for the company’s top executives.
Read also: New business buoys Discovery
In the 2016 financial year the group’s top nine executives cashed in R210 million in salaries, bonuses and other benefits .
The group’s four business units reported strong growth in the period. Discovery Life’s operating profit grew by 13 percent to R1.7 billion, driven largely by individual new business that went up 10.2 percent. Discovery Health normalised operating profit increased by 12 percent to R1.1 billion and new business increased by 20 percent to R3 billion.
Discovery Invest grew its assets under management by 14 percent year on year to R64 billion, with new business growth of 9 percent to R1.2 billion. Discovery Insure recorded new business growth of 23 percent to R495 million in the period.
Gore said the organic growth strategy the group had decided to employ had positively affected its bottom line.
“The efficacy of the Group’s organic growth methodology was shown over the period by performance of existing businesses growing operating profit by 11 percent to R3.786 billion and new business by 9 percent to R6.477 billion,” Gore said.
The group said its emerging businesses, Discovery Insure, Ping An Health and Vitality Group saw 43 percent growth in new business to R1.7 billion.
The company said it had made progress in getting a banking licence after it had received authorisation from the Registrar of Banks to establish a banking presence in South Africa. Gore said an investment of R244 millio had gone towards the group’s banking aspirations.
“Pursuant to this authorisation, Discovery has a period of 12 months to fulfil the said conditions and make application for final approval in terms of Section 16 of the Banks Act,” Gore said.
Discovery shares rose 4.35percent to R124.70.