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EF: You were appointed CEO of both Vitality Health International and Global Health Insurance at the beginning of 2020, what was the mission you set for yourself in both appointments?
JB: Discovery has been in South Africa over the 30 years, we have built the South African health and other businesses into very strong franchises, we have done very good work globally expanding our health insurance business and worked in partnering life insurance in many regions. My mission is to leverage the expertise and assets we have built up in South Africa to grown our businesses in in healthcare, health insurance, health tech, etc globally., Starting with an important focus on our continent and then move on to other parts of the world. Ten years ago we started Ping An Health, a health insurance business in China with Ping An Insurance Group -we still own 25% of what today is a very successful health insurance company. We also have a start up health insurer in Australia in partnership with AIA, but our ambition is to grow into one of the world's leading global insurers. As far as the Americas are concerned we have a wellness business in the US and some partnerships in Latin America in health and life insurance which we want to expand and build on as well.
EF: Could you elaborate on the Vitality Health or on any initiatives are you especially proud of over this last year and a half?
JB: Discovery was very much on the frontline making a powerful contribution to the national effort in facing Covid-19. We did a huge amount of ground work in communication, on vaccination, on modeling, and on data collection. But if I could single out one thing it must be the vaccination campaign. The mounting of an incredibly professional operation and running a large number of vaccine centers all over the country open to everybody not just to people with health insurance or our customers. This was done in strong collaboration with the government and it has led the way for other private healthcare players to come in and do the same thing. The more subtle but no less powerful message for our healthcare sector in South Africa is that it´s been the strongest and most effective example of public-private collaboration that I have seen in the last 30 years I have been involved in the sector. This is also a global lesson as there is not enough collaboration between sectors across the world due to general distrust or competition. The only positive thing of the pandemic is that it has brought together different actors in society, ones that wouldn’t normally work together, figuring out it is possible to work together and is something I am hugely proud of. I played a personal and active role during 2020 with the Solidarity Fund which worked very closely with B4SA but is a completely separate structure and was set up in February 2020 by the President . It collected several billion rand of donor money, setting up a governance structure to govern that money giving grants, doing things like supporting the government, procurement of PPE, later bringing in Covid test kits and supporting hospitals. Now there is a lot of work going on in communication and supporting vaccines as a separate nonprofit vehicle and as medical advisor and I am very proud of the work we did which as an incredible example of public private collaboration but also about bringing big and small business together as well as ordinary citizens, with tens of thousands donating money and many people volunteering to make it possible. The government right from the start had a clear insight that their process might be too slow to deal with something as quick moving as Covid-19 so they set up a separate vehicle that could make decisions in days and that is indeed what happened. Discovery donated my time to the Solidarity Fund which I was involved with for most of 2020.
EF: What were the lessons learnt from managing through this period and overseeing various countries operations?
JB: From a global perspective, many of the challenges businesses and employees faced were both similar and unique. The pandemic was both global and local. The local challenges in China for example were different because the Chinese government took a very different approach trying to prevent even the smallest outbreak and individual employees initially faced very significant quarantines but they came out of lockdown way before the rest of us and this served as a lesson learnt. What has been common to all markets is that most businesses had to adapt to working remotely very quickly and I believe we were all impressed at how quickly that change was done without affecting customer service productivity or efficiency. I was impressed at how easily our employees adapted even though leaders all over the world couldn’t wake up early enough for the stresses involved for individual employees. My colleagues and leaders in general have dealt with a lot of strain one way or another, long hours on zoom, the lack of physical contact with friends and colleagues. Our business is built on the concept of wellness, we have been talking about employee wellness and mental and physical health and nutrition for over 25 years, long before it came fashionable, we have been doing this since the early nineties and even if we were aware of this earlier than most it still wasn’t soon enough. Another lesson was the need for speed, there are many crises in business and mostly leaders needed to react very quickly to serve their customers and protect their own futures. It goes against the instinct of mature business leaders to react with speed as usually they prefer to slow things down and take into consideration the costs and consequences of their decisions. With Covid-19 leaders have to figure out solutions quickly and this was an important lesson learnt. Conservative business practices and prudence in managing a business usually pay off, our philosophy is to be prudent in spite of taking some risks but always having adequate capital reserves, we price conservatively prioritizing safety and sustainability over short term profit and in a crisis that occurs every a hundred years as the present, it always pays off. So to be prudent and careful in risk is a third lesson learnt. Discovery is unique in encouraging people to act in a way that improves their risks from a health perspective, we make it easier and more rewarding for people to be healthier or to be a safer driver, or behave in a financially more responsible way - that is and has always been our model. Risk is behavioral and can be changed. For 200 years life insurance has been based on the idea first developed in Scotland in the 18th century based on an actuarial table that said if a person was 52 years old and a woman has a life expectancy of 25 years, x is the price for life insurance and that´s how it works in most businesses in the world. But we take a different view, each person is unique and can change their own risk profile and we give them a premium for their life or health insurance based on their own risk. If they get healthier the premiums come down and if they get unhealthier the premiums go up. We have been using our model for a long time and understand what works and what doesn’t. For example in South Africa about 300 thousand of people have had Covid, approximately 30 thousand of them hospitalized and eleven thousand have died. Quite a lot of these people are part of our Vitality program so we were able to see how people were engaged with their fitness and health and how they reacted to Covid, all very powerful data giving us some very interesting information:
- There is an incredibly powerful relationship between physical fitness and the immune system. A 45 year old man without chronic conditions and not involved in the Vitality program –a person we don’t consider very healthy- has a Covid death risk of 1, whereas that risk in a 65 year old person becomes 1.6, 60% more simply due to age and if the same 65 year old had blood pressure or diabetes the risk went to 2, a 100% increase. If the 65 year old was engaged in an exercise program (3 times a week for 30 minutes) the risk fell to 0.9, lower even than a 45 year old and even if he had a chronic condition their risk only went to 1.1. With only 7 % of the population vaccinated South Africans are very exposed to the Delta virus so Vitality has saved thousands of lives from Covid.
- Those that are more engaged with their health are the ones that got vaccinated quickest. The differentiator is education and the more good information put out to the public on the Covid issue the better. The tragedy of this pandemic are the voices against the vaccine, especially in the US confusing millions of people and it is important that businesses as ours be a trusted voice using that trust to put out carefully curated information that is accessible, understandable and trustworthy. Discovery all over the world has invested effort and money communicating with our clients, regularly updating the best information to our employees and clients to the extent we have become one of the most trusted sources of data on the pandemic which is unusual for a private company. Our research institutions have been putting out a lot of brilliant data and models and been made available to the decision makers as an example of that trust.
EF: Did you introduce any new KPIs during the pandemic to measure adaptation to new circumstances?
JB: We didn’t introduce new metrics to measure our employee performances but we increased the pace of monitoring and measurement dramatically mostly with standard KPIs in the different businesses as we had to look at certain areas with a higher intensity. For example, in any kind of insurance, health or life, a big metric that affects profitability is what we call lapses -people cancelling their policies- and the lockdowns and huge unemployment gave us cause for worry so we tracked the lapses on a daily basis not on a weekly or monthly basis as we used to. The patterns of claims changed more than any of us has seen in our careers, suddenly billions were being paid out in claims we had never seen before, from Covid testing and admissions to hospitals to medication and on the other hand all the other claims fell off a cliff, elective surgeries volumes reduced dramatically, with the associated spending on radiology and other services. This was a very powerful reminder that health insurance is essential. All discretionary health was postponed leading to dynamics within the health insurance business we have never seen before, both good and bad, so we didn’t use new metrics but mainly used standard metrics with far greater attention. Most of new metrics covered Covid, how many tests were being done, what´s the positivity rate, hospital admission rate, etc. While we were worried about increased lapses I think the pandemic made people realize they needed to keep their health insurance or their life insurance in spite of the economic pressure our customers had. The byline of the pandemic is that we learn something new every day.
EF: When you look back to this period in your professional career, what would you like your tenure to be remembered for, what would you like to have accomplished?
JB: I see myself as part of a team, and the legacy I would like us to leave behind is how we responded during the pandemic, that Discovery did the right thing and the test of that is our own people doing the right thing for our customers, the country and the world. But Covid is still very much in our present and won’t be over till it is over. My feeling is that when we look back we will recognize we made mistakes but that in the main we did the right thing for all the stakeholder groups. We put in enormous effort and made big sacrifices including financial spending a huge amount of Discovery resources on doing the right thing even with no hope of recovering that money. I feel we rose to the occasion although we won’t know till Covid is actually over. I do hope that what we have learnt with the pandemic will endure as we all know how easy it is to fall back into old habits but this goes beyond South Africa, I hope the world will learn and take the offered opportunities from the positives learnt and change the way we live. Our legacy is having done the right thing.
