Discovery takes Vitality to Japan

Johannesburg - Listed insurance and financial services company Discovery has expanded its Vitality business partnership model further by entering the Japanese market through a strategic partnership with Sumitomo Life, the fourth-largest insurer globally, and SoftBank Corporation.

The partnership will result in shared value insurance introduced to the Japanese life insurance market through the joint development and introduction of insurance products incorporated with Vitality, Discovery’s wellness program.

Partnerships

It will also focus on the joint development of a platform for the collection of health-related data and wellness activities by leveraging the digital partnership between Sumitomo Life and SoftBank.

Adrian Gore, the chief executive of Discovery, said yesterday that it already had 3.5 million Vitality members in 11 countries globally, with Discovery Vitality in South Africa, VitalityHealth and VitalityLife in the UK, Ping An Health in China, AIA in a number of pan-Asian countries, John Hancock in the US, ManuLife in Canada and Generali in Europe.

Gore said Discovery’s long-term business strategy included the geographical and industry diversification of its shared value insurance model.

“In these partner markets, we expect the Vitality model to be highly relevant for our insurance partners as it provides unique competitive advantage to these insurance carriers,” he said.

Gore said they anticipated Discovery’s partner markets in Pan-Asia, the US, Canada, China and Europe in total would generate a significant revenue stream for Discovery, but it was difficult at this point to comment on the contribution from a particular market.

He added that the Japanese market was the second-biggest insurance market in the world and a significant and exciting market for Discovery.

Real impact

Gore said that with 80 percent of mortality in Japan related to non-communicable diseases (NCD’s), an ageing population and risk factor profile of high blood pressure, smoking and physical inactivity there was a considerable opportunity to positively influence behaviour and make people healthier.

“Vitality can thus have real societal impact in the country and we are confident the Vitality model will resonate with Japanese consumers who are increasingly interested in health and wellness.”

Gore said Sumitomo Life had a more than 100-year-old track record and more than 11 million in-force policies and $18.6 billion (R266.2bn) in annualised premiums.

“We enjoy a respected and solid relationship with them. We are proud to be partnering with Sumitomo Life and Softbank. Our combined strengths will transform the market, create social value and achieve business growth,” he said.

Vitality is a behavioural wellness solution that helps policyholders become healthier by giving them the tools, knowledge, access and incentives to improve their health, with an immediate rewards system that drives positive behaviour change over the long term.

The change in behaviour results in improved profitability for the insurer, which in turn is used to fund the incentives that encourage behaviour change.

Neill Young, an analyst at Coronation, said the strategic partnership was probably a replication of what Discovery had done with AIA, Generali, John Hancock and Manulife where it was effectively licensing the Vitality intellectual property, which was attractive because it leveraged an existing product offering and was not capital intensive.

Young said these partnerships were “a toe in the water in a lot of new geographies where Discovery doesn’t have a presence”.

Discovery shares rose 1.56 percent on the JSE yesterday to close at R125.93.

Reporting by: Roy Cokayne - BUSINESS REPORT