Dis-Chem Pharmacies is expanding into financial services by acquiring a 50% stake (R155.9m) in life insurer OneSpark as reported by moneyweb. OneSpark doesn’t hold an insurance license itself – its products, spanning funeral cover and life insurance, are underwritten by Guardrisk Life Limited. Its selling point on its website is that it offers insurance for as little as R30 per month. As part of its life insurance products, OneSpark offers life cover, disability cover, temporary income protection and illness cover. This partnership will allow Dis-Chem to offer life insurance and funeral cover under the Dis-Chem Life brand, leveraging OneSpark’s technology to provide affordable healthcare access, this being especially important for chronic patients who are typically forced to pay higher premiums because of their condition(s). Dis-Chem’s CEO, Rui Morais, believes this move aligns with their vision of providing accessible and affordable healthcare.
Dis-Chem believes its unique access to customer prescription and medication adherence data will allow it to significantly undercut competitors on life insurance premiums. This confidence stems from their unparalleled insight into customer health behaviors, giving them an edge in assessing risk and pricing policies.
Despite a positive six-month performance with a 16.3% growth in headline earnings per share and a 9.6% rise in revenue, Dis-Chem will face stiff competition from established insurers like Discovery and Old Mutual, who remain optimistic despite anticipating volatility due to the new Health Insurance Bill and Two-pot retirement system.
Furthermore, to compete with Discovery’s Vitality program, Dis-Chem has introduced extraRewards for its health insurance policyholders. This program offers a 20% discount on healthy products and essentials, capped at R600 monthly, potentially offsetting the cost of premiums.
This initiative has successfully increased customer engagement, with participating members visiting Dis-Chem stores five more times per year and spending 67% more on promoted brands. This increased engagement is improving policy retention and driving policy sales, which have doubled year-on-year.
To date, Dis-Chem has launched medical insurance, gap cover and accident cover products together with Kaelo. It acquired a 25% stake in the healthcare provider in 2021 for R200 million.
Dis-Chem plans to leverage extraRewards to encourage healthier behaviors and further engage customers when it launches life insurance in 2025. The key to its success will be its ability to effectively utilize customer data to reduce premiums and attract customers.
New Discovery Program Offers Customized Health Journeys & Incentives
Discovery Health is enhancing its personalized health approach by integrating machine learning and AI to create customized health improvement plans for its 2.2 million adult members. Launching in January, “Personal Health Pathways” will be incorporated into the Vitality rewards program, offering members incentives like Discovery Miles and gameboard plays for actively managing their health. This initiative may also expand benefits within the Personal Health Fund, which currently provides up to R10,000 for daily healthcare expenses.
