JSE-listed Discovery Limited has partnered with Hong Kong-listed AIA Group Limited to create a health insurance business called Amplify Health. The company will meet the growing demand for healthcare services in Asia as the region faces an aging population and growing disease burden.
In a Sens statement released on Tuesday, Discovery announced that through the pan-Asian company, it will own 25% of Amplify Health, with AIA owning the rest.
Amplify Health will operate in various Asian countries – excluding China, Hong Kong and Macau due to Discovery’s existing exclusive partnerships with Ping An Group – and is expected to launch in April 2022.
The new entity is intended to provide AIA’s health insurance business with state-of-the-art production-tested health technology and intellectual property (IP).
The company will also “build and provide health and wellness products and services to third parties throughout the region.”
“Over the past three decades, Discovery has developed unique and powerful capabilities in health insurance, wellness and health management, staffed by considerable experts in intellectual property, technology, data and topic analysis,” Discovery CEO Adrian Gore said in the statement.
“The relevance of these assets and our track record of deployment is demonstrated by the successful application of our capabilities in other markets.”
“All of these learnings have manifested into an end-to-end shared-value healthcare stack that will be transferred into Amplify to ensure that together with AIA we will build significant business in the region and have a positive societal impact,” Gore adds.
Access a growing market
Demand for healthcare services in emerging Asian markets would grow at a rapid pace as more consumers focus on health, wellness and disease prevention.
Additionally, healthcare spending in AIA markets is expected to exceed $4 trillion by 2030. By that time, Asia is expected to have a middle-class population of around 2.6 billion, according to Discovery.
These consumers are expected to be more health conscious and therefore interested in health technologies such as wearables and activity and fitness trackers.
Parts of Asia are also facing a growing aging population. It is estimated that nearly 850 million people in parts of the continent will be over 60 by 2030.
“This unprecedented combination of demographic shifts, rising consumer expectations, accelerated digital adoption, new advances in health technologies, and significant unmet demand for services underpins[s] the strategic importance of Amplify Health,” said Discovery.
AIA Group CEO and Chairman Lee Yuan Siong said the company’s partnership with Discovery to form Amplify Health is an important step in transforming healthcare development and delivery in the region.
“As we look to the future, we see an urgent need for better, simpler and more affordable health care, and a growing protection gap for the region’s growing population. These factors, combined with the fundamental drivers of growth in Asia, present an extraordinary opportunity,” said Siong.
“Discovery is a partner equally passionate about creating value for all stakeholders. I am confident that through Amplify Health, we will continue to help millions more Asian families live healthier, longer and better lives,” added Siong.
What Discovery brings to the table
Former CEO of Discovery Health and current CEO of Vitality Health International, Jonathan Broomberg, has been appointed to lead Amplify Health.
Discovery will transfer its entire health technology stack as well as some of its skilled personnel to help build the new business. Additionally, to ensure the business has end-to-end capability, Discovery will assign ownership of the Health IP and Vitality IP.
Discovery is expected to derive additional revenue from the business over the next decade as AIA’s health insurance business is expected to use Amplify Health’s products and services.
“Discovery will earn additional performance-based contingency fees over the first 10 years of the contract. AIA will continue to pay the fees associated with the existing AIA Vitality contract, supplemented by additional fees in exchange for surrendering ownership of Vitality IP to Amplify Health,” Discovery said.
In terms of future innovation and the creation of health and wellness intellectual property, Discovery and AIA have agreed to share benefits between the two parties.
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