Discovery Limited

Discovery's Vitality model is reciprocal altruism engineered into insurance contracts. The company doesn't just insure risk—it modifies behavior to reduce risk, then shares the savings with customers. Members who exercise, eat well, and engage preventive healthcare receive premium discounts, reward points, and benefits. This is mutualism formalized: both parties benefit from the other's investment in health outcomes.

The FY2025 results demonstrate the model's biological fitness. Normalized operating profit grew 29% to R15.2 billion with return on equity at 15.4%. But the critical metric is engagement: 10.4 million lives covered directly (up 25%), plus another 40+ million through the Global Vitality Network—partnerships with AIA (Asia), Ping An (China), Generali (Europe), John Hancock (US), Manulife (Canada). Each partner licenses Vitality's behavioral modification platform, creating network effects that compound globally. When members across geographies engage with Vitality programs, aggregate data improves risk modeling for all participants.

Examine the Vitality composite performance: VitalityHealth operating profit surged 174% to £50.6 million, driven by stabilized claims from sustained member engagement. VitalityLife profit up 70% to £27.1 million. The causal chain is biological: costly signaling (members demonstrating commitment to health through verifiable actions) reduces information asymmetry (insurers accurately pricing risk) and enables reciprocal altruism (shared savings from better outcomes). Discovery Bank, which integrates financial and health incentives, reached profitability in H2 FY2025—expanding the mutualism into banking services.

The risk is that behavioral modification requires continuous engagement. Unlike traditional insurance's passive risk pooling, Vitality depends on members actively participating in wellness programs. Lapse in engagement destroys the mutualism. But Discovery has embedded incentives deeply: gym discounts, travel benefits, movie tickets, grocery rewards. The company targets 15-20% compound profit growth through 2029 by scaling the Vitality Network globally. This is cleaner wrasse economics: the relationship works because both fish and cleaner benefit from every interaction. Stop cleaning, lose the client; stop rewarding, lose engagement. Discovery has built an entire corporate structure on sustaining that mutual dependence.