(Bloomberg) — Discovery Ltd. is starting to sell private health cover in South Africa at about a third of the price of its prior entry-level product, a move to attract new customers and tap into pandemic-heightened concerns about health.
The administrator of the country’s largest medical-insurance provider, which has more than 40% market share, will offer primary care for about 350 rand ($23) a month, giving customers access to a network of doctors, emergency procedures and treatment for chronic conditions including HIV.
“We have to try and make health care affordable and to more people,” Discovery Chief Executive Officer Adrian Gore said in an interview at the company’s state-of-the-art headquarters in Johannesburg’s financial district. “We’ve never seen efficiency in health care, quite the opposite. Covid may change that as for the first time health care is being delivered potentially digitally.”
More affordable South African insurance could help address a shortage of doctors and dilapidated facilities in the public health system, which is relied on by at least 72% of the nation’s 60 million people. While the country’s ruling party agreed to enact universal national health insurance, known as NHI, in 2007 its implementation has stalled while funding and operational details are ironed out.
Gore, a 57 year-old former actuary, started Discovery in 1992 focusing on private health insurance. The company has since expanded into banking, asset management, life insurance and casualty cover, and is valued at 108 billion rand.
The CEO has also presided over the creation of partnerships across countries including in Europe, U.S., China, Singapore and Australia, giving Discovery access to millions more customers for its Vitality program, which offers discounts to people who keep fit and eat healthily in a bid to lower insurance claims.
Discovery has been criticized regularly over its rising premiums, and a 2018 industry inquiry ruled the company contributed to an uncompetitive market by generating far higher profit than competitors.
The company said that was due to how well it runs the business and not because it charges higher fees. Still, the take-up of medical insurance in South Africa has stumbled with overall membership sliding 0.6% to 8.9 million beneficiaries in 2020 as a stagnant economy hammered disposable incomes.
New Entrants
But with as many as 8 million uninsured people wanting access to private health care, other entrants are circling.
Dis-Chem Pharmacies Ltd. and digital bank Tyme this week launched insurance to tap into a wider and under-served segment of the population. Dis-Chem’s product starts at 431 rand a month and TymeHealth at 139 rand, depending on what exactly a person gets covered.
Buyers of the Flexicare product administered by Discovery also get access to wellness and screening programs. People have become increasingly aware of this concern during Covid-19, Gore said.
“As Covid hit, we saw the correlations of the same risk factors such as diabetes and high body mass index driving higher levels of severe disease and death,” the CEO said. Covid has increased people’s “sense of wellness and resilience, and why it’s important.”
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
