Discovery building in Sandton. Picture: SUNDAY TIMES/SYDNEY SESHIBEDI
Discovery building in Sandton. Picture: SUNDAY TIMES/SYDNEY SESHIBEDI

Your otherwise excellent article on Discovery’s new bank neglected to mention the real strength of the company’s business model: risk consolidation.

By integrating health insurance, life insurance and short-term insurance, Discovery has a holistic view of a client’s risk profile, which can then be accurately priced. This means lower premiums and, thanks to the use of behavioural economics, a steady stream of rewards for good-risk behaviour.

This is a win-win scenario for clients and the company, and is at the heart of Discovery’s continuing success, both in SA and abroad. The new bank promises to take this thinking to a new level.

It’s true that people don’t easily switch banks, but that’s probably because one bank is pretty much like any other, so there’s no real incentive. However, switching to Discovery’s new bank holds out the possibility of something radically different and improved. And switching would be even easier for Discovery’s existing clients, as they already know the company.

Expect major disruption.

Robert Gentle

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