JSE-listed Discovery Limited has joined forces with Hong Kong-listed AIA Group Limited to establish a health insurtech business called Amplify Health. The business will service Asia’s growing demand for healthcare service as the region faces an ageing population and an increasing disease burden.
In a Sens statement released on Tuesday, Discovery announced that through the pan-Asian venture it stands to own 25% of Amplify Health with AIA holding the balance.
Amplify Health will operate in various Asian countries — excluding China, Hong Kong and Macau due to Discovery’s existing exclusive partnerships with the Ping An Group — and is expected to launch in April 2022.
The new entity is set to provide AIA’s health insurance business with state-of-the-art, production-tested health technology and intellectual property (IP).
The business will also “build and deliver health and wellness insurtech products and services to third parties across the region”.
“Over the past three decades, Discovery has built unique and powerful health insurance, wellness and health management capabilities, made up of considerable IP, technology, data analytics and subject matter experts,” Discovery CEO Adrian Gore says in the statement.
“The relevance of these assets and our deployment track record are demonstrated by the successful application of our capabilities in other markets.”
“All these learnings have manifested in an end-to-end shared value healthcare stack that will be shifted into Amplify to ensure that together with AIA we will build a significant business across the region and make a positive societal impact,” Gore adds.
Tapping into a growing market
Demand for healthcare services in Asian emerging markets is said to be growing at a rapid pace, with more consumers redirecting their focus to heath, wellness and disease prevention.
Further, expenditure on healthcare across AIA’s markets is expected to exceed $4 trillion by 2030. By this time Asia is expected to have a middle class population of about 2.6 billion, according to Discovery.
These consumers are expected to be more health conscious and thus interested in healthcare technologies such as wearables and activity- and fitness trackers.
Some parts of Asia are also faced with a growing ageing population. It is estimated that close to 850 million people in some parts of the continent will be above the age of 60 by 2030.
“This unparalleled combination of shifting demographics, rising consumer expectations, accelerated digital adoption, new advancements in healthtech and significant unmet service demand underpin[s] the strategic importance of Amplify Health,” Discovery says.
AIA group CEO and president Lee Yuan Siong says the company’s partnership with Discovery in forming Amplify Health is an important step in transforming the development and delivery of healthcare in the region.
“As we look to the future, we see an urgent need for better, simpler and more affordable healthcare, and an expanding protection gap for the growing population in the region. These factors, combined with the fundamental drivers of growth in Asia, present an extraordinary opportunity,” Siong says.
“Discovery is a partner who is equally passionate about creating value for all stakeholders. I am certain that through Amplify Health we will go on to help millions more Asian families live healthier, longer, better lives,” Siong added.
What Discovery brings to the table
Discovery Health’s former CEO and current CEO of Vitality Health International, Jonathan Broomberg, has been tasked with steering Amplify Health.
Discovery will transfer its entire health technology stack as well as some of its skilled personnel to assist with building the new venture. Further, to ensure that the venture has end-to-end capability, Discovery will assign ownership for the Health IP and the Vitality IP.
Discovery is expected to earn additional income from the venture for the next decade, as AIA’s health insurance business is expected to make use of Amplify Health’s products and services.
“Discovery will earn additional performance-based contingent fees over the first 10 years of the contract. AIA will continue to pay fees linked to the existing AIA Vitality contract, supplemented by additional fees in return for the assignment of the ownership of Vitality IP to Amplify Health,” Discovery says.
In terms of future innovation and health and wellness IP creation, Discovery and AIA have agreed to share benefits between the two parties.