How South African tycoon Adrian Gore's bath-time idea built insurance giant Discovery

South African tycoon Adrian Gore says the idea that turned Discovery Ltd. into one of the world's best-known health insurers came to him while he was lying in the bath.

"It came to me in the bath, but it wasn't my idea alone," Gore, Discovery's founder and group chief executive officer, said in a July interview about the origins of Vitality, the program that pays people in points and rewards for exercising, eating better and going for health checks. "It was about data, but it was a moment in the bath."

Gore's reasoning was that an insurer that pays out when people get sick has a direct stake in keeping them well. Rather than only covering medical bills, Discovery would reward members for healthy behavior and price its cover around it. "We were happy to make this work financially," Gore said. "And we said, you earn points by doing healthy things."

From a startup to a global model

Gore, a trained actuary, started Discovery in Johannesburg in 1992 at the age of 28 as a health insurer, with backing from the group that owned Rand Merchant Bank. Vitality followed in 1997, and Discovery listed on the Johannesburg Stock Exchange two years later.

The model has since spread far beyond South Africa. Vitality now counts more than 50 million members across 36 countries, through Discovery's own businesses in Britain and the U.S. and through partnerships with insurers such as China's Ping An Health Insurance Co. Discovery uses the same approach in car insurance, where drivers earn rewards for driving well, and in banking.

The company has pushed further into the U.S. this year. It completed the purchase of health-engagement company Icario on Sept. 1 for $27 million upfront and up to $32.5 million more tied to revenue targets, and on Sept. 17 said it would offer its Vitality AI health coach, built on Google Cloud and Google's Gemini models, to American health plans and employers.

Record year

Discovery's normalized profit from operations rose 17% to R17.75 billion ($1.07 billion) in the year ended June 30, the company said on Sept. 3. Headline earnings climbed 34% to R12.92 billion ($778 million), and the full-year dividend rose 33% to 384 cents a share.

Discovery Bank, the digital lender Gore has spent years building, swung to a profit of R370 million from a loss of R68 million a year earlier, as its client base grew 26% to 1.57 million. Vitality covers just under 12 million lives outside China, up 14%.

"When people are encouraged and rewarded to make better health, driving and financial decisions, everyone benefits," Gore said when the results were released.

Gore's stake

Gore owns about 45.6 million Discovery shares, or 6.68% of the company. The stake was worth about R12.2 billion ($732 million) in mid-October, when the shares traded at R266.60 on the Johannesburg Stock Exchange.

Gore, who was born in 1964 and studied at the University of the Witwatersrand, has led Discovery since he founded it 34 years ago. He has said the insight behind Vitality depended on the data the company collected on its members, which showed that healthier behavior led to lower claims.

Figures were converted at R16.6 to the dollar.