Discovery, the health-insurance administrator that has sold nine out of every 10 Apple watches in South Africa to encourage its members to exercise, has hired a team of bankers as it steps up efforts to create a new lender.
“We ’re flat-out with the infrastructure and the regulatory process for banking,” co-founder and chief executive Adrian Gore said.
“We’ve got the capital, we’ve hired bankers, we’re building substantial systems. We want to make an offering that’s relevant and can win market share,” he said.
Gore started Discovery as a private health insurer in 1992 and has since expanded into investments, credit cards, life insurance and property and casualty cover.
With partnerships across the US, China, Europe, Singapore and Australia, Discovery has access to a network of more than 200 million customers it can tap for its Vitality loyalty programme, which offers discounts to people who keep fit and eat healthily in a bid to lower claims against its policies.
Discovery offers Apple watches – which sell from R6 000 on the iStore website – via Vitality to members who have a credit card through the company for a one-time fee of R350.
Customers who maintain and increase their exercise regimes over the next two years will not have to pay for the watches, while missing their goals means having to make monthly payments depending on how much they fall short.
“We ’ve distributed more than 30 000 Apple watches,” Gore said.
He wears one himself and is known to walk at least five flights of stairs to his office, where a range of dumbbells lie near his desk.
Discovery, which has alliances with insurers including AIA Group and Ping An Insurance Group of China, planned eventually to offer the Apple Watch programme in the US, Asia and the UK, he said.
Banking might boost future earnings, he said.
A year ago, Discovery said it wanted to build a lender after buying control of its credit-card unit from FirstRand, Africa’s biggest lender by value.
It hired former bank executive Barry Hore to head the team and has applied to the Reserve Bank for a licence.
Five lenders control more than 89% of South African banking assets and at least 16 other companies and 15 local branches of international banks offer services from private banking to wealth-management services and unsecured lending.
The company’s Discovery Card unit hasmore than 250 000 customers.
“We ’re looking at the modern and traditional structures that people need,” Gore said. “We ’ve got a good embedded base with Discovery Card . . . It will take a year or two to get it into the market.”