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Discovery - Audited financial results for the year ended 30 June 2004
DISCOVERY HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1999/007789/06)
ISIN: ZAE000022331
Share Code: DSY
(`Discovery` and `the Company`)
Audited financial results for the year ended 30 June 2004
Highlights
- Operating profit +102% to R708 million
- New business annualised premium income R3,2 billion
- Discovery Life profit +138%
- Discovery Health profit +40%
- Destiny Health Illinois business turns profitable
- Joint venture with Prudential launched in UK
- Diluted HEPS before abnormal items +18% to 77,4c
Introduction
Discovery`s performance over the year was pleasing. Robust performance, combined
with strong organic growth and increased efficiencies across all of Discovery`s
businesses, resulted in a 102% rise in operating profits. Despite a 29% increase
in the weighted number of shares in issue, diluted headline earnings per share
before abnormal items increased by 18%.
Discovery`s businesses are built on the foundation of innovation and engaging
people in the managing of their health in order to achieve better social and
financial outcomes. This has enabled Discovery to take a leadership position in
the markets wherein it operates by offering life and health insurance products
that are competitive, efficient and sustainable. This has led to strong organic
growth and a competitive position going forward.
Discovery is evolving into four key insurance businesses, each underpinned by a
common philosophy and values set, but each in a different stage of development:
- Discovery Life exceeded expectations, further
consolidating its leadership position within the pure
risk assurance market, and increasing operating profits
by 138%.
- Discovery Health`s pleasing performance led to the lowest
contribution increase for members of the Discovery Health
Medical Scheme (`DHMS`) announced for 2005, and an
increase in operating profits of 40%.
- In the US, Destiny Health made solid progress, resulting
in a decrease in its operating losses by 37%. Its core
Illinois business turned profitable during the second six
months of the year, while significant progress was made
in rolling out its joint ventures with Guardian Life
Insurance Company of America and the Tufts Health Plan of
Boston, Massachusetts.
- In the UK, Discovery entered into a joint venture with
Prudential plc. The new company PruHealth is set to
launch within the next few months.
Discovery Health
Discovery Health`s performance over the past year has demonstrated the company`s
ability to balance and align member and corporate interests. Through the
performance of Discovery Health`s product structures and sound risk management,
the Discovery Health Medical Scheme generated a surplus of R1,52 billion over
the financial year, enabling it to make significant progress toward meeting the
31 December 2004 statutory reserve requirements and creating a foundation for
lower medical inflation for its members.
Discovery Health and the Discovery Health Medical Scheme recently announced a
5,4% contribution increase for 2005 - significantly lower than previous years,
- along with more comprehensive benefits. Also announced was significantly
increased remuneration for general practitioners and specialists, an important
step toward maintaining and enhancing access to quality health care for its
members.
Discovery Health`s strong performance is reflected in an increased market share
of 22,8% (2003: 20,8%), and a growth in membership to in excess of 1,6 million
members. The increased membership and administration efficiencies manifested in
a robust financial performance by Discovery Health, with operating profits
increasing by 40% to R522 million (2003: R372 million).
Discovery Life
Discovery Life`s performance exceeded expectations. Profits increased by 138% to
R271 million (2003: R114 million) and new business annualised premium income
increased to R554 million (2003: R423 million), generating significant value.
The number of policyholders increased by 91% to 119 884 (2003: 62 914). The
company`s market share of new business of the entire life assurance market now
exceeds 6,1%.
During the year under review, Discovery Life continued to focus on product
innovation and the integration with Discovery Health and Vitality. The launch of
the PayBack Benefit allows Discovery Health members who are Discovery Life
policyholders to receive back a substantial percentage of their life assurance
premiums, based on how they manage their health. This and other product
structures have enabled Discovery Life to maintain a competitive position within
the markets in which it operates.
In just four years since its launch, Discovery Life has achieved a position of
leadership in the pure life assurance market. This was reinforced when it was
rated top by its peers in a recent industry survey conducted among South
Africa`s leading insurance companies by PricewaterhouseCoopers Inc.
Destiny Health
The past year was significant in the evolution of Destiny Health, Discovery`s US
subsidiary. In February of this year, Destiny Health achieved its goal of
breakeven for its core Illinois business and made an operating profit of US$190
000 for the last six months of the year, in this market. In addition, Destiny
commenced rolling out its joint ventures with Guardian Life Insurance Company of
America and the Tufts Health Plan of Boston, Massachusetts.
Destiny experienced a 66% increase in membership to 36 189 (2003: 21 858) as a
result of a 70% increase in new business to US$73 million (2003: US$43 million).
Operating losses decreased by 37% to R106 million (2003: R169 million),
reflecting a combination of membership growth, improved quality of business and
focused expense management.
The second half of the year saw Destiny enter new markets with the roll out of
its joint ventures with Guardian Life Insurance Company of America in the mid-
Atlantic region and Tufts Health Plan of Boston, in Massachusetts. The joint
venture with Guardian has already produced pleasing results while the roll out
of the Tufts Health Plan venture has been slower than initially anticipated.
Going forward, Destiny will aim to leverage the distribution capability and
scale of its joint venture partners to grow its membership base.
Destiny Health has continued its focus of moving the significant elements of the
back-office functionality into Discovery to achieve the benefits of scale and a
lower cost environment. An important by-product of this has been the creation of
job opportunities for South Africans of nearly 100 jobs in the past 12 months.
It is anticipated that this will continue and grow as the business expands.
New initiatives: PruHealth and DiscoveryCard
In addition to its established businesses, Discovery continues to invest in new
businesses which will drive future growth. Two important new initiatives were
announced during the period under review:
- PruHealth: Work has been underway on the establishment of
PruHealth, a joint venture with the UK`s Prudential plc,
since early 2003; it will be a key area of focus in the
next year as it launches into the UK`s private medical
insurance market. The PruHealth product range will be
built on Discovery`s consumer-driven healthcare
experience and, as with Destiny Health, the company`s
administrative and service support functions will reside
in South Africa - there are already over 100 full-time
PruHealth employees in this regard. PruHealth is
progressing ahead of schedule, with the infrastructure
approaching operational readiness and the Vitality
product offering largely completed, having secured deals
with two leading UK gym networks. Approval was recently
obtained from the UK`s Financial Services Authority,
paving the way for the consumer product launch, the next
key milestone in PruHealth`s development.
- DiscoveryCard: The launch of DiscoveryCard drives the
pursuit of better health, while providing a platform for
growth, integration and differentiation. DiscoveryCard is
a `new generation` credit card offering full VISA
functionality, automatic savings at a network of leading
stores, interest-free finance for healthcare and also
operates as a Discovery Health and Vitality membership
card. The Card will be available to Discovery members
from late October.
Future prospects
The capital raised in 2003 through a claw-back offer to shareholders provides
sufficient capital to fund Discovery`s current growth aspirations. The strong
operating performances, increased efficiencies achieved across all the
businesses and new initiatives position the company well for future growth.
By order of the board
LL Dippenaar A Gore
Chairman Chief Executive Officer
26 August 2004
Directors
LL Dippenaar (Chairman), A Gore (Chief Executive Officer), JM Robertson (Chief
Operating Officer), Dr BA Brink**, JP Burger, Dr NJ Dlamini, RB Gouws#, MI
Hilkowitz, NS Koopowitz*, HP Mayers*, B Swartzberg*, SV Zilwa, SD Whyte*
*Executive **Appointed 19 February 2004 #Resigned effective 5
December 2003
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited
(Registration number 2004/003647/07)
Ground Floor, 70 Marshall Street, Johannesburg, 2000
PO Box 61051, Marshalltown, 2107
Secretary and registered office
MJ Botha
155 West Street, Sandton 2146
PO Box 786722, Sandton, 2146
Tel: (011) 529 2888 Fax: (011) 529 2958
Statement of gross inflows under management
for the year ended 30 June 2004
Group Group
R million 2004 2003
Gross inflows under management 14 345 10 946
Less: Collected on behalf of third 10 647 7 190
parties
Gross income of group 3 698 3 756
Income statement
for the year ended 30 June 2004
Group Group
R million 2004 2003
Gross income of group 3 698 3 756
Outward reinsurance premiums (293) (342)
Net income 3 405 3 414
Policyholder benefits (1 078) (1 646)
Recoveries from reinsurers 237 280
Net policyholder benefits (841) (1 366)
Commissions (576) (438)
Operating and administration (1 495) (1 437)
expenses
Vitality benefits (314) (227)
Transfer from assets/liabilities 529 404
arising from insurance contracts
Profit from operations 708 350
Local operations 842 519
Foreign operations (134) (169)
Investment income 124 123
Realised and unrealised investment 68 (77)
gains and losses
Fair value adjustment to (71) 64
liabilities arising from investment
contracts
Financing costs (47) (25)
Foreign exchange loss - unrealised (62) (17)
Profit before abnormal items and 720 418
taxation
Abnormal items - 120
Profit before taxation 720 538
Taxation (299) (182)
- Operating profit (299) (146)
- Abnormal items - (36)
Profit after taxation 421 356
Minority share of loss (3) 6
Net profit attributable to ordinary 418 362
shareholders
Basic earnings per share before
abnormal items (cents)
- undiluted 83,0 71,0
- diluted 79,7 67,3
Basic earnings per share (cents)
- undiluted 83,0 92,5
- diluted 79,7 86,8
Headline earnings per share before
abnormal items (cents)
- undiluted 80,5 69,3
- diluted 77,4 65,7
Headline earnings per share (cents)
- undiluted 80,5 90,8
- diluted 77,4 85,2
Weighted number of shares in issue 504 051 391 714
(000`s)
Diluted weighted number of shares 536 025 432 123
(000`s)
Balance sheet
at 30 June 2004
Group Group
R million 2004 2003
ASSETS
Cash and cash equivalents 998 1 469
Government and public authority
stocks
- available-for-sale 130 54
- at fair value through profit and 52 54
loss
Equity investments
- available-for-sale 602 217
- at fair value through profit and 251 224
loss
Investment in associate 2 4
Investment assets 2 035 2 022
Loans and receivables 430 291
Deferred taxation 10 7
Assets arising from insurance 1 318 772
contracts
Intangible assets 38 36
Equipment 201 221
Total assets 4 032 3 349
LIABILITIES AND SHAREHOLDERS` FUNDS
LIABILITIES
Current liabilities 578 547
Provisions 22 16
Taxation 43 44
Deferred taxation 128 26
Liabilities arising from insurance 6 9
contracts
Liabilities arising from 36 16
reinsurance contracts
Financial liabilities 716 1 527
- Investment contracts at fair 400 370
value through profit and loss
- Borrowings at amortised cost 316 1 157
Total liabilities 1 529 2 185
Outside shareholders` interest 67 67
SHAREHOLDERS` FUNDS
Share capital and share premium 1 276 429
Reserves 1 160 668
Total shareholders` funds 2 436 1 097
Total liabilities and shareholders` 4 032 3 349
funds
Cash flow statement
for the year ended 30 June 2004
Group Group
R million 2004 2003
Cash flow from operating activities 92 210
Cash generated by operations 337 143
Working capital changes (119) 158
218 301
Dividends received 14 6
Interest received 88 107
Interest paid (14) (24)
Taxation paid (214) (180)
Cash flow from investing activities (504) (202)
Investment purchases (565) (104)
Proceeds on disposal of investments 176 56
Increase in investment in associate - (2)
Proceeds on disposal of equipment - 15
Purchase of equipment (93) (138)
Purchase of intangible assets (26) (23)
Decrease/(increase) in loans 4 (6)
receivable
Cash flow from financing activities (39) 1 017
Proceeds from shares issued 878 225
Share issue costs written off (30) -
against share capital
Dividends paid to Destiny Health (2) (13)
preference shareholders
Minority share buy-back (9) -
Redemption of preference shares - (334)
Increase in borrowings - 263
Repayment of short-term loan (876) -
Proceeds from short-term loan - 876
Net (decrease)/increase in cash and (451) 1 025
cash equivalents
Cash and cash equivalents at 1 469 458
beginning of year
Effects of exchange rate changes on (20) (14)
cash and cash equivalents
Cash and cash equivalents at end of 998 1 469
year
Statement of changes in equity
for the year ended 30 June 2004
Invest-
Share Share ment
R million capital premium reserve
30 June 2003
Balance at 1 July 2002 1 426 31
Implementation of AC133 - - -
Net profit for the - - -
period
Dividends paid to - - -
Destiny Health
preference shareholders
Unrealised loss on - - (28)
investments
Realised gains on - - (7)
investments transferred
to income statement
Revaluation of forward - - -
exchange contract
Translation of foreign - - -
subsidiary
Issue of capital * 2 -
Balance at 30 June 2003 1 428 (4)
30 June 2004
Balance at 1 July 2003 1 428 (4)
Issue of capital * 877 -
Share issue expenses - (30) -
Net profit for the - - -
period
Dividends paid to - - -
Destiny Health
preference shareholders
Realised loss on - - -
minority share buy-back
Unrealised gains on - - 69
investments
Realised gains on - - (14)
investments transferred
to income statement
Revaluation of forward - - -
exchange contract
Translation of foreign - - -
subsidiary
Balance at 30 June 2004 1 1 275 51
* Amount is less than R500 000
Trans-
Retained lation Hedging
R million earnings reserve reserve Total
30 June 2003
Balance at 1 301 (15) - 744
July 2002
Implementation (17) - - (17)
of AC133
Net profit for 362 - - 362
the period
Dividends paid (12) - - (12)
to Destiny
Health
preference
shareholders
Unrealised - - - (28)
loss on
investments
Realised gains - - - (7)
on investments
transferred to
income
statement
Revaluation of - - (14) (14)
forward
exchange
contract
Translation of - 67 - 67
foreign
subsidiary
Issue of - - - 2
capital
Balance at 30 634 52 (14) 1 097
June 2003
30 June 2004
Balance at 1 634 52 (14) 1 097
July 2003
Issue of - - - 877
capital
Share issue - - - (30)
expenses
Net profit for 418 - - 418
the period
Dividends paid (1) - - (1)
to Destiny
Health
preference
shareholders
Realised loss (5) - - (5)
on minority
share buy-back
Unrealised - - - 69
gains on
investments
Realised gains - - - (14)
on investments
transferred to
income
statement
Revaluation of - - 8 8
forward
exchange
contract
Translation of - 17 - 17
foreign
subsidiary
Balance at 30 1 046 69 (6) 2 436
June 2004
* Amount is less than R500 000
Segmental information
for the year ended 30 June 2004
Health
United
South States of United
R million Africa America Kingdom
30 June 2004
New business 2 122 494 -
annualised premium
income
Gross inflows under 12 550 534 -
management
Income statement
Gross income 2 057 380 -
Reinsurance (45) (90) -
Net policyholder (476) (168) -
benefits
Commissions - (39) -
Operating and (1 014) (189) (28)
administration
expenses
Transfer from - - -
assets/liabilities
under insurance
contracts
522 (106) (28)
Return on assets - - -
under insurance
contracts
Profit from 522 (106) (28)
operations
Investment income
and
realised profits
Financing costs
Foreign exchange
loss - unrealised
Profit before
abnormal items and
taxation
Cash flow statement
Cash generated by 655 (103) (28)
operations
Cash flow from - (12) -
financing
activities
30 June 2003
New business 2 284 378 -
annualised premium
income
Gross inflows under 9 732 428 -
management
Income statement
Gross income 2 638 332 -
Reinsurance (133) (119) -
Net policyholder (1 115) (149) -
benefits
Commissions - (31) -
Operating and (1 018) (202) -
administration
expenses
Transfer from - - -
assets/liabilities
under insurance
contracts
372 (169) -
Return on assets - - -
under insurance
contracts
Profit from 372 (169) -
operations
Investment income
and
realised profits
Financing costs
Foreign exchange
loss - unrealised
Profit before
abnormal items and
taxation
Cash flow statement
Cash generated by 453 (84) -
operations
Cash flow from - 139 -
financing
activities
R million Life Vitality Holdings Total
30 June 2004
New business 554 62 - 3 232
annualised
premium income
Gross inflows 858 403 - 14 345
under management
Income statement
Gross income 858 403 - 3 698
Reinsurance (158) - - (293)
Net policyholder (197) - - (841)
benefits
Commissions (510) (27) - (576)
Operating and (251) (326) (1) (1 809)
administration
expenses
Transfer from 431 - - 431
assets/liabiliti
es under
insurance
contracts
173 50 (1) 610
Return on assets 98 - - 98
under insurance
contracts
Profit from 271 50 (1) 708
operations
Investment
income and
realised profits 121
Financing costs (47)
Foreign exchange (62)
loss -
unrealised
Profit before 720
abnormal items
and taxation
Cash flow
statement
Cash generated (248) 62 (1) 337
by operations
Cash flow from - - (27) (39)
financing
activities
30 June 2003
New business 423 63 - 3 148
annualised
premium income
Gross inflows 476 310 - 10 946
under management
Income statement
Gross income 476 310 - 3 756
Reinsurance (90) - - (342)
Net policyholder (102) - - (1 366)
benefits
Commissions (390) (17) - (438)
Operating and (184) (260) - (1 664)
administration
expenses
Transfer from 346 - - 346
assets/liabiliti
es under
insurance
contracts
56 33 - 292
Return on assets 58 - - 58
under insurance
contracts
Profit from 114 33 - 350
operations
Investment
income and
realised profits 110
Financing costs (25)
Foreign exchange (17)
loss -
unrealised
Profit before 418
abnormal items
and taxation
Cash flow
statement
Cash generated (266) 40 - 143
by operations
Cash flow from - - 878 1 017
financing
activities
Group consolidated embedded value statement
Group embedded value at 30 June 2004
Group Group % Group
R million 2004 2003 change 2003 (1)
(Illustrative,
after capital
raising)
Shareholders` 2 436 1 097 1 944
funds (2)
Value of in-force 4 803 4 021 19 4 021
business before
cost of capital
Cost of capital (363) (190) (190)
Discovery Holdings 6 876 4 928 40 5 775
embedded value
Number of shares 513,3 377,9 513,3
(millions)
Embedded value per R13,40 R13,04 3 R11,25
share
Diluted embedded R12,89 R12,20 6 R10,76
value per share
(1) In June 2003, Discovery proceeded with a claw-back offer to raise R875
million at an issue price of R6,50 per share. The shares were issued and listed
on the JSE on 28 July 2003. At 30 June 2003, the capital raised was reflected as
a short-term loan owing to FirstRand Limited, but is now included in
shareholders` funds. The embedded value at 30 June 2003 has been restated for
illustrative purposes to demonstrate the impact of including the capital raised
(net of preliminary and share issue expenses) in shareholders` funds, and
including the shares issued in the calculation of embedded value per share.
(2) Outside shareholders` interest in Destiny Health consisting of preference
shares, were converted at R14/US$1 in the prior year and not at historical rates
of R7/US$1 in accordance with the group`s accounting policy. Comparative figures
have therefore been restated to record the preference shares at historical
rates. The effect of this restatement is to increase the currency translation
reserve by R60 million and reduce outside shareholders` interest by R60 million.
Value of in-force business at 30 June 2004
Value Value
before cost Cost after cost of
R million of capital of capital capital
Health and Vitality 3 194 - (1) 3 194
Life 1 447 (340) 1 107
Destiny Health (2) 162 (23) 139
Total 4 803 (363) 4 440
(1) With effect from 1 January 2004, no allowance has been made for the
inclusion in the Health value of in-force of any reinsurance contracts and the
cost of capital associated with such contracts.
(2) Figures for Destiny Health reflect Discovery`s 98,1% shareholding in Destiny
Health at 30 June 2004.
Value of in-force business at 30 June 2003
Value Value
before cost Cost after cost of
R million of capital of capital capital
Health and Vitality 3 007 (17) 2 990
Life 901 (145) 756
Destiny Health 113 (28) 85
Total 4 021 (190) 3 831
Embedded value earnings for the year ended 30 June 2004
Group Group
R million 2004 2003
Embedded value at end of period 6 876 4 928
Embedded value at beginning of 4 928 3 321
period
Increase in embedded value 1 948 1 607
Net issue of capital (847) (2)
Dividends paid to Destiny Health 1 12
preference shareholders
Implementation of new accounting - 17
standards
Revaluation of forward exchange (8) 14
contract (1)
Embedded value earnings 1 094 1 648
(1) This adjustment relates to cash flow hedges taken out to reduce exposure to
currency risk on capital inflows to Destiny Health in July 2003 and capital
inflows to Prudential Health in September 2004.
Components of embedded value earnings for the year ended 30 June 2004
Group Group %
R million 2004 2003 change
Total profit from new business (at 637 670 (5)
point of sale)
Profit from existing business
* Expected return 534 500
* Change in methodology and (361) (0)
assumptions (1)
* Experience variances 197 380
Adjustment for minority interest in (4) (2)
Destiny Health
Adjustment for Guardian profit (8) -
share in Destiny Health (2)
Foreign exchange rate movements (3) (67) 45
Interest on loan capital (41) -
Return on shareholders` funds (4) 207 55
Embedded value earnings 1 094 1 648
(1) The change in methodology and assumptions item will vary over time to
reflect adjustments to the model and assumptions as a result of changes to the
operating and economic environment. The current year`s changes are described in
detail in the table below (for previous periods refer to previous embedded value
statements).
(2) In terms of the agreement between Destiny Health and the Guardian Life
Insurance Company of America, Guardian will share in 50% of the profits from
Destiny`s pre-alliance business once the business written by Guardian reaches 23
500 beneficiaries. It is expected that this will occur in June 2007. Based on
Guardian`s progress at 30 June 2004 towards achieving this target, the value
attributed to Destiny`s pre-alliance business from 30 June 2007 has been reduced
by 6,8% in the embedded value calculation.
(3) The impact of foreign exchange rate movements was previously shown as an
experience variance. The item includes a R62 million unrealised foreign exchange
loss during 2004, arising on a R279 million loan entered into by Destiny Health
with RMB International (Dublin) Limited.
(4) Return on shareholders` funds is the investment return on shareholders`
funds after tax and management charges. Shareholders` funds include the life
product`s negative reserve.
Methodology and assumption changes for the year ended 30 June 2004
Health and Destiny
R million Vitality Health Life Total
Modelling changes (1) (109) (14) (104) (227)
Premium escalations - 3 (26) (23)
Lapses 51 (24) (73) (46)
Risk discount rate 98 - - 98
Economic assumptions - 7 (13) (6)
Expenses (10) 27 (36) (19)
Mortality and morbidity - 9 120 129
Ancillary services fee (144) - - (144)
(2)
Margins - - (52) (52)
Tax (3) (53) - - (53)
Other 2 (20) - (18)
Total (165) (12) (184) (361)
(1) The Health and Vitality modelling change relates to a refinement of the
model used to value the Discovery In-house (Custom) schemes. The Life modelling
changes consist mainly of an increase in the cost of capital of R74 million due
to changes in the method of projecting the Capital Adequacy Requirement over the
lifetime of the portfolio.
(2) Members of Discovery Health Medical Scheme will not be charged an ancillary
services fee with effect from 1 January 2005.
(3) The tax assumption change reflects a higher average VAT rate modelled.
Experience variances for the year ended 30 June 2004
Health and Destiny Prudential
R million Vitality Health Life Health Total
Renewal (14) (9) (6) - (29)
expenses
Joint venture - (35) - (28) (63)
expenses
Administration (21) - - - (21)
fee increase
Extended 133 11 2 - 146
modelling term
(1)
Lapses 94 (24) (53) - 17
Contribution 1 (7) 23 - 17
increase
Policy 24 (2) 100 - 122
alterations
Mortality and - (12) 26 - 14
morbidity
Health quota 5 - (13) - (8)
share
reinsurance (2)
Life - - 1 - 1
reinsurance (3)
Other 17 (4) (12) - 1
Total 239 (82) 68 (28) 197
(1) The projection term for Health, Vitality, Destiny Health and Group Life at
30 June 2004 has not been changed from that used at 30 June 2003. Thus, an
experience variance arises because the total term of the in-force business is
effectively increased by 12 months.
(2) The 10% Health quota share reinsurance treaty for 2004 which was previously
modelled has not been modelled in the 30 June 2004 calculation. The Life product
cost of capital has increased due to the manner in which the cost of capital was
previously shared between the Life and Health products.
(3) During the past financial year, Discovery Life entered into reinsurance
agreements to protect against future lapses. The effect of these agreements is
included in the reinsurance variance. With effect from 1 July 2004 a quota share
agreement was entered into, effectively reinsuring 50% of the risk profits on
certain classes of business in-force as at 31 December 2003 for a fixed period
of approximately six years. Discovery Life earned R200 million in terms of this
contract in July 2004. The terms of the quota share agreement are such that the
agreement will have a negligible impact on the embedded value and was not
included in the embedded value at 30 June 2004.
Embedded value of new business for the year ended 30 June 2004
Group Group %
R million 2004 2003 change
Health and Vitality
Gross profit from new business at 155 238
point of sale
Cost of capital - (3)
Net profit from new business at 155 235 (34)
point of sale
New business annualised premium 1 259 1 834 (31)
income (1)
Life
Gross profit from new business at 583 494
point of sale
Cost of capital (131) (76)
Net profit from new business at 452 418 8
point of sale
New business annualised premium 406 355 14
income (2)
Annualised profit margin (3) (%) 13,3 13,1
Destiny Health
Gross profit from new business at
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