Discovery says the deal, which values the company at £620m, affirms its strategy to make the UK its second home market.
The joint venture was initially established as an equally-owned venture between Discovery and Prudential in the private medical insurance market and subsequently expanded to offer long-term protection products. The joint venture underwent a shareholding change in 2010, at which time Discovery increased its shareholding to 75 per cent.
The provider covers over 800,000 people, occupying a number four position in the private health insurance market, with combined annual premiums of approximately £480m and annualised new business in excess of £110m.
Discovery’s model incentivises engagement in wellness, actuarially and clinically determining the effect of engagement on mortality, morbidity and health risk, and pricing these effects dynamically into the insurance premium over time.
As part of this announcement, the former businesses of PruHealth and PruProtect will be rebranded and consolidated under a single insurance brand, “Vitality”. “VitalityHealth” will be used in the private medical insurance market, and “VitalityLife” in the long-term protection market. Prudential will continue to support the business for a transitional period.
Discovery CEO Adrian Gore says: “Discovery’s increased investment in the UK has always been part of our longer-term strategy. It will afford us the opportunity to realise our vision to further entrench our insurance model and to be recognised as the best protection provider in the UK. Being highly receptive to the needs of our clients, and highly engaged with them, mean that we are well placed to achieve our goal of substantially improving the health of two million people in the UK by 2020. In my view, we are well on track to move insurance as a low-interest product category to one that is aspirational.
“Prudential has been a vital partner in this process and it’s only with their help over the past decade, and their ongoing support, has this been possible.”
