Discovery Limited (PDI.AX) Earnings Call Transcript & Summary

Welcome to the Discovery Group Capital Markets Day event. We are very appreciative today, all of those that have joined to try to gain a deeper understanding of our business and spend the time with us today. Today, we are showcasing the newly formed Vitality, which is international global business. And we are hosting today from our head office in South Africa, but we are going to be joined by executives around the world. We are hosting from our U.K. offices in the U.K., and then we'll be joined at Shanghai Towers with our China team there. As you can see from our agenda today, we'll be breaking down the discussion today, starting off with our group CEO, Adrian Gore, who will take us through an introduction of Discovery Group, where we are today and then particularly around the formation of the new global business, Vitality. We'll then be joined by Emile Stipp, who will show -- demonstrate how we are furthering the share value model in the group and around the world. As you can see from the agenda, as we move on to it, you will see that we will then be moving first of all to our global businesses previously known as Vitality Global. And then finally, we'll be ending off in the U.K. We thank you very much for the time today. We appreciate the depth will hopefully allow you to gain a deeper and better understanding of our business and our strategy. I will now hand over to Adrian Gore, the Group CEO.

David, thank you. Thanks for that. It's my role to make some contextual remarks and just try and position our group, obviously. But importantly, the formation on Vitality One business composite focused on globalizing our capability. The group now, as you can see, clearly is in 2 distinct composites, Discovery South Africa and Vitality. And then all of it on the Vitality shared value frame, which is one of the key issues that you'll see over the presentation. Important to make the point that the group has been built on a very simple idea and purpose, make people healthier. You will see the manifestation of this has intensified dramatically and our deep conviction in the model is what's driving the Vitality business globally. And hopefully, that will become clear over the presentation. You will have seen our results. The businesses have performed well robustly, as I hope you've seen. So across the board, we're coming out of a year in a position of strength, a lot to do, but contextually feeling very comfortable about where we are. I would point out to you, it's a strong point that we made in our results announcement a few months back is that the group is in a different phase of growth. You can see that evidenced by looking at the pattern of our operating profit. It tells a story of organic growth and what we've attempted to do. In a sense, the period after 2015, we've called it kind of unfettered organic growth. You can see the compound annual growth rate over 22%, very strong growth. But of course, when you're building organically, you have to start new businesses that take capital. And the bigger you get, the bigger the startups need to be to make a dent on that growth. And so in the period 2015 to 2023, considerable investment was made, new investments were made in new startups, but most notably Discovery Bank, and a considerable focus on trying to build those to scale. That's expensive to do and you can see the compound annual growth rate at 9% [ longer off ] the 22% previously. You can see the COVID effect in the middle. But it doesn't matter if you look at the start and the finish, that growth is 9%. We've now moved into a place now a considerable amount of work has been done to scale the bank, and I'll touch on that briefly. But throughout the group, [ culling anything that doesn't work ], bringing things to scale, getting our businesses to grow, and particularly focused on scaling the bank and the global businesses. And you can see now we've kind of popped up about 15% organic growth, and we're pretty comfortable in this period, the group can grow 15% to 20% per annum over the next 5 years without recourse to capital. Obviously, if we achieve that, that will be a considerable result. But we're feeling good about what can be achieved. If you look at the actual financial metrics, in that projection, this is over the 5 years, it's not guidance, we're giving you a guideline over the 5-year period. You can see that 15% to 20% growth. It is driven by the reduction in a sense in the spend on new initiatives coming down from 15%, in fact, at its peak, close to 25% as we built the bank coming down now to around the 5% level. Still, there will be a spend on growth, which we, of course, must do. You can see the leverage coming down, dividend cover hopefully coming down over time as the business grows. So we're in a very different phase and to an extent, I made this point before when you build any business organically, you get kind of like this S-shaped curve where you go into losses as you try and scale it. You turn it, if you're lucky, you scale it and then any business, the real growth starts to plateau. The vexing problem is how you scale a group over time. Most groups in a sense, start to plateau and then grow by acquisition. So you use capital to do that and you get layers of plateaus adding up. Our approach has been to build businesses of scale organically and over time, get them to scale. What you see is if we get it right, and I believe that's where we are to the extent that the group's position is on the shoulder of that curve, which is perfect. We have in the SA business considerable growth potential through the bank. We have in Vitality, our global business, as you will see, we believe the ability to grow 20% to 30%. The weighted average of the 2 gives you this growth rate of 15% to 20% on the shoulder of the curve and enough in the tank in the sense that we can do that, stay on the shoulder without plateauing, without recourse to capital. So the group is in an important point, and you can now see the 2 composite businesses, South Africa, 12.5% to 17.5% growth, and Vitality 20% to 30% growth. And that is the investment thesis. That is what we need to show you here and why we believe we can do it. Let me briefly just touch on the SA piece. This is about Vitality, the global business, but I'd like to just touch on the South African piece. It's made up of exceptional businesses. We are pretty clear of what we need to do. We need to make sure that each one of our businesses is market-leading firstly. Secondly, we need to scale Discovery Bank. Thirdly, we need to bring those products on to the composite face of the bank. And fourthly, we need to really evolve our shared value model. You'll see the theme of the presentation is really hyper-personalization and the ability to really target making people healthier and actually bring that into the offering, into the pricing, et cetera. The SA business has grown strongly. You can see new business growth over the last 5 years has been strong. Operating profit has grown strongly. Our entity is well capitalized. And to an extent, we believe our businesses are very well positioned. It's important to say that all of them are built on exactly the same architecture, the shared value chassis, the incentives to manage health better, manage money better, all the same architecture coming into the same kind of incentives and rewards using behavioral economics, exactly the same. And that we believe gives us a massive competitive capability and then bringing that onto the face of Discovery Bank. Discovery Bank has scaled exceptionally well. Its growth continues to accelerate. You can see on the left-hand side, we're now over 1 million clients or so. Growth is strong. NRR is strong. It's ahead of budget in terms of capital. We believe we'll breakeven or break into profitability in the next few months. And we expect 2 million clients generating ZAR 3 billion of profit by 2029. So the bank is a critical piece of the growth. And the architecture of the bank is absolutely perfect to have the face of all of our products on the face of the bank. It provides, I think, from a customer perspective, an incredible value proposition that your entire financial and health world sits on the face of the bank which you use, the payment rails, the ecosystems, travel, fitness, food, et cetera, and all this comes together into this one powerful customer-centric composite. It's not a cross-sell play, but a customer-centric composite that adds considerable value. And all of the behavioral economics that plays through manifest in one currency on the face of the bank. So that's where we're heading in the South African context. I'm feeling very good about where we need to go. And that piece of it means that the group will grow in the SA composite. The question today, and as David alluded, this is a day about understanding global ambitions and how we will scale the capability. What you will see is later with Emile is the expansion of the Vitality shared value model, a considerable amount of work has taken place over the last 18 months. And to an extent, our deep conviction in the power of the model is what lies behind the formation of Vitality into one composite and how it plays out. I would say to you that over time, we've learned about the value drivers in each of the industries we're in, health insurance, life insurance, banking, motor insurance, retirement provision, et cetera. We understand where those value drivers are: selection, persistency, selected lapsation, causality on claims and correlational claims and, of course, better upsell and better new business production in each of those areas. The other point is that we've made this point often, but I think the forces tend to intensify as we go on. The global forces are kind of conspiring and coalescing in a way that's making the model much more powerful globally. Of course, the issue of social responsibility of purpose, we're seeing most insurers wanting to engage their clients more, wanting to move from a transactional business to one that actually engages and many of our partners are changing the kind of their purpose, longer lives, better lives, healthier lives, et cetera. We're seeing that playing out across the world. But then, of course, the issue of technology. We're seeing incredible leaps in technology, and you will know this. Beside things like wearable devices, AI now is facilitating a massive capability in our space. And in the health care space itself, powerful transformative technology, GLP-1s, Ozempic, et cetera. It's creating a very different force and a very different set of aspects in the funding, thinking and the health of people. So it's an incredibly moving -- fast-moving space. The demographics are also working in our favor. The societies we're in are aging. We're getting high levels of chronicity. So all of this stuff has to be applied to finding ways to people to live longer and better health and therefore, to our purpose of making people healthier. But I come back to the nature of risk, and that's at the core of our conviction because more and more we understand that risk is affected by people's behaviors. It's not a preexisting issue. People aren't predetermined to do anything in the sense you have obviously a set of genes and a proclivity to certain things, but how you behave, how you live your life has a massive effect on health, on mortality and life expectancy, lifespan, health span, et cetera, and quality of life. And so these things are fundamental. One of the biggest assets, I believe, our group has is the largest data set of this kind. We have 600 million longitudinal member months of data, bringing together wellness data, financial data, clinical data, radiology, pathology, medication, the ability to see across many decades of behaviors to understand correlation, causality and more from the data, and that's a critical, critical thing. You would appreciate if you have 3 deaths per 1,000 lives, which is a typical number, you need a huge exposure to have enough deaths in the database to make accurate predictions of what affects mortality. So the database is a critical issue. But the point I guess, and I've made this point if you followed us, and I want to make it again. The data is so compelling about the causal effect of behavior change. And this is behind our conviction about the power of the model and its ability to disrupt financial markets, insurance markets and health insurance markets. First point on the left hand side of the chart is just the effect, for example, of physical activity, the causal effect, if you follow people through over time from being sedentary, 0 activity to being moderately active to being very physically active, you can see how quickly mortality rates drop. The effect on mortality is dramatic. And what's exciting about it is it doesn't depend on age. Older people with chronicity also respond well. So there's no -- the idea that these are -- the contemporary idea that this is good for healthy young people is not the truth. The fact is people at age, chronicity, it's never too late to do this stuff. In the middle, you can see besides the substantial effect, the elasticity of health span and life span is tremendous. So at the bottom of the slide in the middle, a female, a 70-year-old with chronicity has a life expectancy of 10.1 years, 6 years of expected healthy life. You can see with just a few activities, she can change that to 14 to 15 years, but nearly doubling the health span with just a few activities. So it's elastic, and it responds well to 1 or 2 actions. So it talks to hyper-personalization and it talks to the ability to get people to do the right thing for their health that makes a massive difference. So it's this causality of behavior change that is at the heart of our conviction of our competitive capabilities and our ability to affect people in a positive way. Our view and our deep view is that the strength of that causality has massive implications on life insurance, health insurance and retirement savings. In the case of life insurance, the one opportunity is an obvious one. The fact that we're completely aligned to our clients. If they're healthier, we are more profitable. If they live longer, we're more profitable. So we can use that profit to incentivize behavior change. But the key issue here is if you accept that behavior is causal, then life insurance as it is now, combines controllable risk into the risk pool. In other words, it pools controllable risk where over time people's behavior, which is controllable is in the risk pool. And you all know an efficient insurance market should never control, should never pool a controllable risk. So there's inefficiency, and I'll touch on that a bit later. In the health insurance space, the industry knows well the cause and effects of behavior change, but people don't get engaged with their health insurer. They don't get engaged in the stuff. And the other point is that the industry tends to look at people in different silos, disease management, wellness, prevention, care coordination, not as an individual going through the life in a journey, not in a hyper-personalized way, which is the opportunity. And then retirement savings, as we've moved from a defined benefit world to a defined contribution world, all of the risk has shifted to the individual investor, the saver, life span, health span, expenses in retirement, people are not prepared for this. And the extent of elasticity to those factors has a massive effect on the replacement ratio that people get. So all of these industries, and they're critical and pivotal are affected by the understanding of the causality of behavior change. I want to make this point, I am being technical, but it's critical to understand this, and you'll see this play out later in the various businesses. Our view of life insurance, if you have seen actual mathematics behind it, it's a complicated issue, but fundamentally on the top of the slide, while the mortality curve is up sloping, we charge a flat premium. That's the value proposition to the client, get underwritten at a point in time and pay that dotted line over the rest of your life. The problem with that is that people change behavior, they become healthier, they become sicker based on behavior change. We've seen that from the data. And because you're pooling controllable risk, you get adverse selection. So if you look at the portfolio on the right-hand side, people start to lapse out of their policies. We know that well. Lapse rates can be anything from 5% to 10%. So the portfolio degenerates. But bear in mind that people leaving tend to be healthy. The sicker people stay. So you've got a smaller portfolio of sicker people. That's in the price. Our approach is different. We fan out our premiums based on how people engage into the right risk pool. So you get rid of the controllable effect. The portfolio declines less and the people in the portfolio, those that are engaged, not the sick. It's an entirely different dynamic. The effect of a model economically is that we cover more people at a lower price. And we can take that saving, that efficiency and give it back to people in terms of incentives and rewards. And that's the shared value. You will see later in the presentation, and this is very important, we have now the tools to understand exactly actuarially how to do this, how to set embedded value so that you get kind of an EV neutrality based on status, how you set the shared value and how you understand how VONB climbs based on product design. So in our kind of models, we start with 100 units of VONB of a standard policy. We know the effect on claims, on lapsation, on selective lapsation. We know how much we give back in terms of integration and shared value. And then we know the effect on new business and upsell. So it gives us kind of a volume knob to work out how much to give back to people to get the right benefits and what that does to new business and upsell effectively allowing us to up VONB per policy and to up the portfolio of VONB through additional sales and more upsell. And Emile -- both Emile, I think and Shaun will touch on this as we play this out in the market. In the health insurance spaces, we've seen the effect of this in our home market, and we're playing that out in different markets now and accelerating, and you'll see that in Jonny Broomberg's presentation. If you look at the distribution of health status, and health utilization. It's amazing that if you focus on, for example, diabetics and you get the right people do the right actions, you can bring down the cost by nearly 60% of the entire portfolio of diabetics if you just get 25% of the people to do the right thing. So getting engagement with precision is critical. And then one point that we are working on in our South African market that over time, we will take into Vitality is the issue of retirement savings. We're working with BlackRock merging together Vitality with Aladdin, and that really gives the adviser and the saver an understanding not just of the asset management issues and the complexity around asset management. But in fact, the issues of demography, health span, life span and how you play it out. You can see in the slide and I hope you get a chance to study it, just how elastic health and life span are. So if you're planning for retirement, your state of health and how you behave over that time has a dramatic effect on the replacement ratio. That's a fundamental issue. So these are capabilities that we're very, very pleased with how they are progressing and that we'll take into those markets as we go forward. The core of what we are doing, and Emile will touch on this in great detail is what we call this personal health pathway stack. We've taken all of our capabilities in over the last 18 months, invested considerable amounts of great data layer that gives us all of the data, the understanding of it, followed by a dynamic risk assessment that lets us understand people, individuals, health span, life span, every single risk factor. Thirdly, very important, the ability to use AI to actually look at value propensity and habit to tell that individual exactly what they should be doing. And then simply at the top, serve it out through partners and [ incentives ] and talk to people using LLM models and others in a way that they understand to develop 2 rings that really get people to do the right thing, the most accurate rings that appear on the face of the health plan or the life product that we're trying to get to. So the complexity of this and it moves around with health status is to offer the most personalized, accurate health pathways that are globally done, and that's really the competitive issue. The basis of that is the basis of our global business. That's what Vitality does. In the belly of Vitality, we continue to offer points and statuses, but the core of this hyper-personalization, we believe will take us into that next dimension. And so it manifests in 3 businesses, Vitality U.K., Vitality Network and Vitality Health International, which we will show you over the course of the day. Let me say this that the formation of Vitality as a composite has come over a decade or so or more of work in different parts of the market. We did a JV with Prudential in the U.K. that led to PruHealth and PruProtect. They became Vitality Health and Vitality Life. We worked with AIA initially about taking the marketing -- the shared value model into the life insurance space that scaled and became Vitality Network. We have bought a share in Ping An Health as a start-up and build that, et cetera. So many different businesses with different structures started to form. The formation of this Vitality composite now into one composite, one clear management team, one area of focus is bringing that all together into a considerable capability of a number of empowering layers. And as I said to you before, business model pivot on Vitality with 3 business units inside it. There's a huge amount of work that's been done. I'm very pleased with where we've got to. It's focused, it's sharp, it's efficient. On the bottom is we have 4,000 people globally. They're now focused into using our institutional scale in the U.K. So we're finance people, et cetera, the core functions are there focused harmonized. We built 5 centers of excellence at the base. Importantly, we're harmonizing the brand. We built a considerable powerful brand in the U.K., the [ Roundel ] using different symbols like [ Stanley Outdoor ], which has been a tremendous power in the U.K. So many of the stuff will harmonize across many markets that we do. We built a massive partner network of health providers, of grocers, working with great companies like Apple globally, harmonizing those across the global space is critical. And then a crucial point is the technology platforms. We have a number of different platforms in different markets, harmonizing and making them into operable, getting efficiencies, getting the right functionality is critical. All of this leads you to the business model and the business model through that stack feeds those rings into the various businesses, as you see above. The business model is clear. I think the investment thesis is strong. And to an extent, that is the purpose of today to dive deeply into each of these -- into the business model into each of these businesses to explain exactly how they work and understand how we expect to get the returns that we set out to achieve. So the vexing problem is how we globalize the capability. So there are 3 business units. We built a considerable capability in the U.K. through Vitality Life and Vitality Health, it's an exceptional company. It's got exceptional traction in the U.K. It's a complex market. It's a market that has incredible technology, so understanding how Vitality works, getting the models to work is very, very powerful. But in the market itself, we worked hard to get the business to where they need to be. Last year was a difficult year for Vitality Life and Vitality Health for different reasons. But we worked hard to get into the right size and the right capability. Vitality Health is an incredible, incredible quality health insurer in the U.K. You'll see more of that a bit later. Its investment thesis is pretty straightforward. If it achieves its targeted margin of 7.5%, the cash generation, return on capital is exceptionally strong. And that's the target we'll show you how we plan to achieve it. Vitality Life is complex. The U.K. is the fourth largest life insurance market in the world. It's highly, highly commoditized, IFA sell-through portals. We're now using the shared value model to get the right rates of return on invested capital. This has been a complex process over the last 5 years. You will see later how we're achieving that and how we aim to do better as we go forward. It's an important business to understand the investment case. If you achieve those rates of return, we're not investing external capital into Vitality Life. So essentially inside its belly, it's churning over this capital at scale and getting considerable value over time, and you'll see that later in the presentation. The second piece, Vitality Network is how do you scale this model globally, complex problem. It's not possible to acquire life insurers in different markets at scale. I think the capital required would be ridiculous. And obviously, these businesses today are not necessarily capital efficient. So the thesis behind Vitality Network is, can we inject our model into partners? Can we create that added VONB, and can we share in the value added? That's exactly the model that we've created, and it's over time, maturing very, very well. We'll show you through 3 steps, getting deeper penetration in our partners, getting more partners, optimizing the shared value model to get more value. And critically, the kind of geared model, the economic model of the business itself creates a fantastic result. We expect revenue to grow by 15%, but the geared nature of the model should say operating margin climb to 50%, and therefore, considerable growth in profitability. On the third line, expanding in health insurance is different. Health insurance in every market is different, it's local, different health care systems, different coding systems, different government regulation, different rating factors, et cetera. So the approach there has been a careful one of equity stakes without tremendous amounts of capital. Ping An Health was the [ start ] of that. Amplify Health has followed, we are now pivoting to health plans and making a considerable focus on the U.S. to take this model into the U.S., and Jonny Broomberg will tell you more about that. If we get that right, and we believe we will, considerable value creation should come out of that. Ping An Health to us has been a tremendous process in the last 2 years, have seen how that business has grown. When you bring these together, you get an earnings growth of 20% to 30%, as I said, at the outset without recourse to capital. And that's really the -- without recourse to much capital, we'll see a play out in the business. And that at the core is the investment case. So hopefully, I've explained to you what we've tried to do. The purpose of the day, as David said, is to actually illustrate the shared value model itself, of course, but then how it plays out in the businesses, which you'll see in more deep dives. Enough from me, let me hand back to David.

Thank you, Adrian. I think a very important elucidation of where the group is in terms of it's strategy, in terms of the evolution and the current investment case that was explained quite clearly through that. As Adrian guided, I think what underpins all of this is the importance of the model and the evolution of the model. And as a result, we thought it was quite important to help you today take you a little bit deeper in understanding the power of the data and the capabilities that have been built in extracting and globalizing that model. For that, I'd like to welcome Emile Stipp to take us through the depth of this discussion.

Thank you, David, and thank you, Adrian. I'm very excited to be here and to give you a sense of what we're building with the shared value model. Now there's 3 things that I think is important in covering today. The first is what we can see in the data, and I think it is very exciting, and it is unique. The second is what we're building the stack that you see in front of you on the basis of these insights. And the third thing is what does it mean for our policyholders, for our partners and for our investors. But the stack basically is built off the data. From there, we go to dynamic risk assessment. On the basis of that, we're in a position to recommend the next best action to every single member that we cover, whether in life or in health and beyond that. And then finally, we can incentivize people to take those actions. But the data drives everything. And we have worked on this data set now for decades. One of the great pleasures in my job is to speak to many external parties about the data that we have. And the one key theme that comes through is that we have not come across any other data set like this in the world. It's longitudinal, it includes people's behavior, how they react to incentives. But crucially, it also includes the outcomes, both in health and in mortality. And that gives us unique power that we can build on. And what we're basically saying to the world is we're making two statements, and that rolls up into one big statement. The first one is that we're saying we -- exercise makes people healthier. I don't think this is particularly controversial. I think many people understand that. What we can see from our data, though, is exactly how much exercise makes you exactly how much healthier. But the second statement we're actually making is also to say that we make people exercise. And that's an important thing, our ability to do this is through our incentives and through our products. But when we combine these two statements, what you can see is that our mission is actually a causal statement. We're saying that we, as a group, make people healthier, and we can prove it. and that's part of what I want to cover today. So the way that we prove it, firstly, this was our foundational study, causal inference study that we based in South African data. It contained about 0.5 million participants, and we tracked people over a period of 5 years. You can see there the number of mortality cases that we had in the period was about 6,700, but this was enough for us to establish causality in the data. And the way that we do it is that we track a particular cohort of people, let's say we start with the unengaged, observe them between 2013 and 2014. These are people who do little to no exercise. Some of them in the following 3 years will remain at that level, but some of them through the incentives that we offer will go to low levels of activity, medium or moderate levels of activity and some will end up developing habits of high levels of activity. And what we can see then between 2017 and 2018 is we can already see an impact on the mortality in the fifth year. How does it change given these differences? Now what that gives us the ability to do is to identify the causality in the data, provided that when we compare different cohorts of people against each other, we adjust for all the confounders. And Adrian has already mentioned it in his slides, but I think it is worthwhile just to spend a few minutes on it. On the top right-hand side, you can see what we have found in the data, which is that as you grow older, the impact of physical activity increases. So the older you get, the more important it is to be physically active. The second thing is that it's very important to be consistent in the activity, and we'll talk a little bit about habits going forward. But effectively, the effect that we show on the right-hand side is not the effect of just cutting the data between those people who exercise and those who don't. If we do that, you get the results on the left-hand side, that's the unadjusted mortality impact. That includes both the effect of selection and behavior change. You'll see the impact is bigger. But with causal inference, because we adjust for all the confounding factors, we can accurately identify what is the impact of somebody changing their physical activity levels. And the way to do this is summarizing the causal diagram that's in the middle of your screen. Effectively, we adjust in that eligibility period, every single cohort of people, we adjust for all the relevant risk factors. How healthy or sick are they at the outset? Do they have a chronic disease or not? How wealthy or poor are they? What's their socioeconomic status, the age? But also crucially, we adjust for is their engagement in Vitality up until that point? How much did they exercise coming into the study? If then at that point, we changed physical activity, and we observe what happens if somebody changes their activity and develops a new habit exercise, it's at that point that we can say that the effect that we observe on the mortality is causal. And that's what you see on the right-hand side of the screen. An important test for us there was to look not only at people who start off with no level of activity, but also people who start with a low level of activity, moderate activity. And that's the result at the bottom right-hand side. Now what you would expect if this effect is causal is that if you start with some level of activity and then you increase it, then that impact will be slightly lower than if you start with no activity. But crucially, if you stop exercising that mortality will increase, and that's what you see right there. So we are confident that this is a causal effect that we have identified. With the rich data that we have, what it means is that we can run these sort of causal inference models, whether we're looking at mortality outcomes at in-hospital claims costs, what's causal impact of exercise and in-hospital claims. We can look at lapsation, we can look at all the relevant risk factors and all relative risk factors as well. But what this gives us, given the fact that we adjust for the confounders, it's a very powerful capability. It means that we can apply these findings to international markets despite the fact that we may not have the full set of data in those markets. What it means is that when we identify delta in exercise, we will predict the outcome of that accurately despite the fact that we may not have such a rich data set in any market that we go into. That means that this model is basically exportable. We can take these insights into any market in the world and be confident that we get it right. And that's the concept of data subsidization, which we have already applied in our markets based on the data that we have in South Africa and the U.K. So we can prove in a causal way that exercise makes you healthy. I'm just going to very quickly deal with how we know that we make people exercise. This is data from the U.K. It shows step count every day, and you can see the pattern across our book. What's very interesting here, obviously, at the 0 level, there's a spike. So there's people who don't wear their devices in a particular day, we don't get any steps there. There's a fairly smooth progression between 0 and 7,000. You can see how the number of step counts per day increases. But look at the spikes at 7,000, 10,000 and 12,500 steps. Now that's the point in the U.K. at which we offer rewards. And what you can see people do, and it's actually obvious from the data, if at, let's say, 11:50 at night, you realize that you're not at 10,000 steps, you've got 9,950. You're going to walk around the coffee table until you get to 10,000 so you can get your coffee tomorrow. And we see people doing exactly that. And what that means, even if you just look at this picture, you can tell that we make people healthier because we make them exercise and exercise makes people healthier. So given this -- given the insights that we have, we understand at any point at somebody's life, what is their risk given what they've done up until that point, but also how could their risk change if they were to change their behavior because we have a causal impact. And we use this. We use all of the rich data that we have on the left-hand side. We combine it with our longitudinal set of data over many years to express it in the end and the life span and the health span that we have for every member that we cover. We understand what the relativities are. We understand what they should prioritize in terms of their lifestyle, what's their likelihood of developing different disease and what's the individual mortality curve that they're on, given the habit that they have. So I've mentioned habit a few times, and I think this is a crucial thing for us to understand when we look at dynamic risk factors. So we've gone beyond just observing actions and behaviors. So there's a point at which an action becomes a behavior. But there's also a point at which a behavior becomes a habit. And that point is when it becomes predictable. So what we're doing in all of our data now, we've applied this concept to everything from exercise to nutrition to how you navigate the health care system. We're looking at the quality of the behavior. Firstly, how good or bad is the behavior. That's what we have on the vertical axis here. And then secondly, how predictable is it? Is it a weak and inconsistent level of behavior? Or is it strong and consistent? And what we see time and again is that, that second axis is very important. It's consistency of behavior that really delivers the value in mortality and morbidity outcomes. Now as I said, we've applied it in many different contexts. We don't have the time to go through all of those, but one example that we have, for instance, is how people navigate the health care system. So this is an example of diabetics. But effectively, across the board when we look at people who suffer from chronic disease, it is very important that you follow the guidelines on evidence-based medicine and do so consistently. And what we can tell from the data is that if you've taken a particular action as a diabetic, for instance, visiting your GP, getting an HbA1c test regularly, that once you've done it 3 times that it becomes 80% predictable that you'll do it the fourth time. Now that's a habit concept. And what we can see from the data as well is that less than 5% of the members that we cover with diabetes actually do the 6 minimum things that you should do as a diabetic every year. And that's the opportunity. If we can get people to develop habits on all of these actions, it means that our diabetic costs will be significantly lower, our diabetics will be healthier and they will live longer as a result of that. That's the opportunity for us if we can get them to basically follow these habits. So when we look at the data, unlike other insurers, we don't only know the gender and the age of people, we also know what their conditions are. But beyond that, we know what their lifestyle is. So if you look at 2 people who seem to be the same in all respects of both diabetics, but if one is physically inactive and another one is physically active, you can already see at 54 that there's a significant difference in both number of years that they'll spend in health and the number of years that they'll spend in sickness. Given these insights, it almost feels if we have a moral imperative thing to tell people what should you do next? We truly understand the causality of behavior. We should tell people what's the most important thing for you to do. And the way that we do that is to combine the value that we derive from causal inference models with the propensity that people have of taking the actions that could have an impact on both their health and mortality. So effectively, what we're doing is saying the value times the propensity gives us the ranking of the action that you should do next. And if we have that ranking, it means that we can construct a personalized health pathway with the aim of building a habit, both of how you navigate the health care system, but also of how you exercise, what you eat and all of these combined factors so we can take everybody to the best level of health that they could possibly be. So again, referring back to person A and B, if you look at their value and their propensity given all the conditions that you have, what we have at the bottom there is the real value of people basically forming a habit in these activities that we're recommending. And you can see how it plays out in their in-hospital costs literally 1 year later. In our health insurance book, you can see how there will be savings if somebody adopts even just 3,500 steps 3 times a week. If they are inactive or if somebody is moderately active, aim for 5,000 steps, do your HbA1c, visit your doctor, take your medication. These things have a significant impact on people in their health insurance book. And if they are healthy in health insurance, it also means that they live longer full life insurance. So with all of these insights and with the ability then to say what is the next best thing that every person should do, we should incentivize that. And that makes all the difference. We can't just tell people do something that's good for you, we have to incentivize it. And if you think about it, the more we personalize it, the more we can personalize the incentives as well. So if you have somebody that's 60, they've never exercised in their life, it doesn't help to tell them do 10,000 steps tomorrow. They won't do it. They haven't done it for 60 years. So the important thing is to start at the level that they can actually manage at a low level and then build them up to a better lifestyle over time. Now if you think about all of this, it becomes an optimization problem. There's basically in the middle of one thing that we want. We want to achieve a delta in the habit that people have because we can see from the causal inference models and from habit theory that as soon as we achieve that, that there will be a delta in the mortality curve, there will be a change in mortality and morbidity for that person. The way that we get there is to look at 3 particular elements. The first one is rewards. Of course, Vitality has offered rewards for more than 2 decades to people. We understand how people react to it. But every person is different, both the level of the reward and the type of reward that we offer, we can optimize. The second point is the hurdle at the bottom right-hand side. So what you need to do in order to meet the reward is equally important. Do we make it easy enough for people? Do we maximize the propensity that they'll actually do it? If we do, we change the habit. And the third thing is the communication, how we tell people about it, basically help us to optimize all of this. Now this is where the technology has made a major contribution in the past to communicate to millions of people at the same time in language that appeals to them was very difficult. Generative AI has changed all of that. And when we bring all of this together, what it means is that the delta and the habit that we achieve gives us value given that delta and habit. And what it means is that when we optimize it, we can make sure that the reward cost is never more than the value that we achieve with that delta and habit. And that's basically what we're building in the background. The way that we do this is through AI. We're building, as we speak, many of these elements are already in operation, reinforcement learning agents that will deal with the action and the hurdle that we service to people, the way that we communicate it to them and the actual reward and how we change that. And we both do leverage based on our existing models, but we also always keep out a control group and then we learn from flexing things. And what that means is that for every person we build up an engagement continuum. We understand what motivates people, how we can get them more engaged in activities that are really important for them and for their longevity. And it's this insight that we get from servicing these more personalized action that goes back into our models, and that becomes eventually self-learning. So many of these aspects are already in operation, but it's building up to something incredibly powerful as we roll it out across our markets. That's in terms of the overall framework. As you can imagine, when we look at rewards, for instance, there's an optimal point at which we should reward people where we get maximum habit change, and we understand reward elasticity then for every individual. That means that we can personalize it and we test all the time by offering rewards through gamification, through all the functionality that we're building in our products and our platform. And the way that it plays out in terms of language is that we create an entity or an audience profile for every individual. We then give generative AI the key challenges and the goals that we have for this person. On the basis of that, we say that person A should get a message that has a supportive tone and person B should get a message that has an optimistic tone. And on your screen, you can see there that despite the fact that both of these people will get step recommendations, the way that it's positioned and the push notification is quite different. So for person A, we'll remind them remember to take 3,500 steps 3 times this week. You got it, that's supportive. For person B, we'll say, just 1 brisk walk can reduce your blood sugar for 24 hours. Why don't you take 5,000 steps 3 times a week. Whilst we're doing that, we're testing all the time, what has the best effect for both of these people, but also for cohorts and we build up the knowledge and the data behind it. And all of this is surfaced in a very simple user experience. There's 2 simple rings with cards telling you what to do, the values on each of these cards and the message is personalized for you. And this is basically live in our markets from 1 January next year. We'll take it first to South Africa, aspects of it is already in operation in the U.K. and then beyond that as we build the capabilities. So why are we doing all this? It's because of the value generated. So we look at it in terms of mortality, we're moving from a traditional view where you have a mortality curve, a QX curve, the gray one on your screen there, which is at the population level. We understand from the data that we have, what is this person's mortality given the chronic conditions that they have and given their lifestyle up until that point, the QX given Y. But now if we look forward to time X plus T, we can say what is the QX given the Y, the lifestyle up until that point, but what could it be if we introduce a Z, a change in lifestyle from that point onwards. And this is data for a diabetic population, depending on when you intervene, for instance, you can take diabetic mortality, which generally is significantly higher than population mortality, pretty close to mortality of the population. And if we start earlier, we can take it even below population mortality depending on the change in lifestyle. Now these results are so powerful that in South Africa, really Discovery Life is basically saying to our members that if you are in Discovery Life, that if you complete your health actions on the ring that we -- and the recommendations that we service up to you, as Discovery Life, we'd be happy to give you an additional payback boost because we believe that this will impact on your health and your longevity very significantly. So we're integrating these insights across our products. But to understand it a little bit better -- little bit better on the life insurance side. On the left hand is generalized shared value. It's what we have had up until now with status. It's worked very well for us in terms of paybacks, integration of benefits, and it's been a very powerful mechanism for us. What we're introducing with habit formation and with activity recommendations at individual level is that even within status, there is additional value to be had from the fact that people adopt habits in accordance with the recommendations that we make. That leads to additional value being derived within status. Some people change status because their lifestyle changes significantly. But even within that, there's also additional value. And the way that this plays out is just to give you an example, this is based on our U.K. relativities. But for every market, these dynamics will be slightly different. If we start off with the policy, let's say, with point-of-sale gross of reinsurance bill of let's say 100. And this policy is not a Vitality policy. It's not optimized. And then we say that we take a person from no activity level to a low level of physical activity. What happens is that there's an increase in the value arising from lower claims, the mortality goes down. Their lapses is lower than it would have been, but it's still a negative effect. The engagement is not enough to necessarily make that lapse effect positive. I'll show you what happens just now when they do. What we offer through Vitality is a significant discount, which takes quite a lot of that value and gives it back to people and lower premiums that they start off with. But then because this person doesn't engage sufficiently, premium increases over the lifetime of the policy, basically is almost equivalent to the discount that they receive. In the end, though, we generate more value for this person if they follow low physical activity habits throughout their life. But look how it changes if they go through moderate physical activity. So the lapse effect then becomes positive. The claims effect is even more positive. And even though premiums increase, it's at a lesser rate, and the optimized discount is bigger than what they had than what they paid back in terms of increased premiums. So the value increases for that person. Good for us. Good for the person who has adopted moderate physical activity for their lifetime. If they go through high physic activity, the impact is even bigger, and you can see how the value grows. So at a portfolio, if you take a portfolio of people with no physical activity, and we have assumed a modest increase in physical activity. If we can move people along the line here, you can see how it builds value at the portfolio level. Now all of this is done subject to that optimization that the reward costs will always be less than the value, and there's flexibility in there. We can optimize to get the maximum effect, and this will build in our populations over time. Now behind this are very sophisticated models, AI models that basically involve dynamic risk assessment, causal inference, a habit index and the value model. There's a recommender model, three key ones, propensity, reward elasticity and the next best action. And then it all comes together in an A/B testing framework so we can continuously tell which actions basically have which outcomes. So that means that we can influence people, and that means that we can optimize all of this. There's a great deal of sophistication behind it despite the fact that it's serviced up in 2 very simple rings to every individual. I'd like to just end off with giving you a little bit more insight of the sophistication behind it by looking at the health care stack that we're building. And what you can see here is that it takes into account all activities, whether it's gym, parkrun, heart rate workouts or VO2 max or steps. We have a physical activity habit index. We then have across a variety of conditions. We look at the habits that people should follow clinically. What's also interesting and what we're working on is that we can see that as members, doctors also have habits. And this also influences the outcomes. And this is something that we will use in order to track the quality of care that people receive. And then we use that for care assistant and health coaches that we can optimize and that we can industrialize effectively with the help of LLMs. We then personalize rewards, whether it's miles or vouchers or points, we understand how habits are formed. And finally, the channel, the style, the timing, the frequency and who we communicate to is optimized through LLMs so that we then have full factorial A/B testing, adaptive experimentation and the ability to influence people. This is the sophistication that we're building in the background. We can do it because we have a unique data asset. And then just to tell you a little bit about generative AI. We actually started on this journey well before ChatGPT was launched. We started about 4 years before working with natural language processing and large language models. But what we have found is that you can't just take these tools off the shelf and apply it. What we found is that when you try and do that, you get about 60% accuracy. And we've had to work very hard to point the tools at the full context of the data that we have. There's the knowledge that we have in our internal Discovery systems. There's also the customer context. And there's all the interactions that we have with our people, whether via our call centers or the virtual assistant that we have already in operations. And effectively, we're building a model garden. So instead of just taking off-the-shelf tool giving us 60% accuracy, we've got this in our call centers now operating at about 92% accuracy. We think pretty soon, we'll get to above 95%, but effectively, it's the context and it's the ability to interpret all of that, that we're building in the background with generative AI. What we find is that hallucination is not a problem. That's something that you might hear from many players in the market, but effectively incompleteness is the problem. It's that last little bit that we're now closing the gap on with the technology that we're developing. So I hope through this that you've got a sense of the data that we have, what we're building and effectively what it means. But maybe let me just end off by saying the data that we have really gives us an opportunity to make people healthier. The technology stack that we're building gives us the capability to grab that opportunity. And what we do -- what we get when we do that is the meaning that it brings to our policyholders. It helps them to live longer. And because of shared value, it means that we basically make people healthier at scale across multiple markets. With that, I'll stop. Thank you very much.

Thank you, Emile. I think a very important Exposé into, I guess, the power of the data, where we're taking the business and where we're taking the model. As you would have seen in the agenda, we are now going to break into a Q&A session. We are going to be joined online by Neville Koopowitz in the U.K. offices as well. And Deon Viljoen will be joining us online as well. Please break -- please, as we go through, please send through questions on the portal. In fact, you could send us those through the day. We'll make sure we get through as many questions as possible over the day. And any questions we don't get through, certainly we'll endeavor to get back to the proposals of the questions.

I will start off moving into the Q&A, and we have a few questions online. The first question, Adrian, if I can pass this one over to you. It comes from Cornette van Zyl from Sanlam. And the question is about Discovery Bank. And the question is the ZAR 3 billion profit target for the bank, is that pretax? And is that before new business acquisition costs? And in fact, Adrian, I'll combine that with the second question around the bank. The question is, what is the targeted ROE of the bank over time? What percentage of revenues do you envisage should come from NII versus NIR? And how important is the full-scale lending offering to the strategy. I hope you capture that all. I'm happy to repeat any questions.

David, thanks for that. [ Peter Hilton ] is not here, but I'll answer the questions. Firstly, the ZAR 3 billion profit at 2 million of clients is an extrapolation of the plan as we have it today. So it's a pretax number. It's the total operating -- it's a total profitability after acquisition costs. So it's the total bottom line operating profit of the bank. And in fact, the move to breakeven or profitability in the next couple of months is, again, on a total basis, taking into account the acquisition costs. The target for our internal rates of return on invested capital is [ risk-free ] plus 10%. We think we should comfortably get there in the case of the bank. So we think we could get to 20% over time. The bank is a full services bank, and that's been one of the important aspects of its architecture. So it is NRR driven, quality client driven and therefore, more than 50%, we expect of the -- if you looked at NIR versus NII, we'd expect the NIR to be kind of 60-40, I would guess. And it's based on quality clients using the bank as we've seen going forward. There is, of course, importance of lending, but we are fairly prudent about lending to quality clients, and we see that expanding over time. The bank has just rolled out the home loan product. More lending products will come over time. And the entire plan at the moment is really based on the current personal lines piece of the bank, personalized banking, personal banking. There's no SME banking, no corporate banking, et cetera. So there's other opportunities over time to layer over it other products. But hopefully, that answers the questions fairly rigorously. Thanks, David.

Thanks, Adrian. Moving on to the next question as well from Cornette from Sanlam. The question is, I guess, we're going to have to cross into different regions on this one. The question is what percentage of total clients in South Africa and other jurisdictions are, first of all, on the Vitality program. And second of all, on high statuses like Diamond. Adrian, maybe if I can pass over to you initially, I think we can also cross over to Neville to give a view around that as well in the U.K. market specifically.

So David, just as a policy, we don't disclose exactly status distributions, but to make the point that across markets, the engagement levels are high, I would estimate significantly higher than most programs like this or comparable structures that attempt to engage clients. So engagement levels are high. And I think the percentage of customers off the lower status is very much in line with what we would expect. So we don't disclose that exactly. In the case of the South African model, I think about 50% or so of the Discovery Health client base is on the Vitality full model. But critically, the personal health pathways that we've just taken you through will be available to the entire client base, and that's part of the design to Emile's earlier presentation, critical that we get the entire client base engaged in improving health, improving chronicity. This varies by market, and maybe Neville, you want to make some comments globally. I'm talking just to the SAPs.

Thanks, Adrian. I think by definition, those clients of ours who are on the Vitality Network and in all the global markets by definition are all on the Vitality program because the Vitality program is ingested into the insurance product in all of those regions. In the U.K., more specifically, we've also embedded Vitality in all of our health products and our life products. There are 2 versions of the program. There's a light version and a full version, and that depends on different criteria. But just about every single person in the U.K. from a new business perspective, gets the Vitality program in some form or other.

Great. Thank you, Neville. Moving on to the next question from Michael Christelis from UBS. The question I think we'll ask for various input maybe starting off with Emile. Are you concerned about the risk of increased complexity in the reward system driving customers away? And how do you deal with that risk?

So thanks, Michael. I think we're actually trying to do the opposite. We're focusing very strongly on a very simple user experience. So instead of telling people, here are all the rewards and all the possible actions that you should take. What we're focusing on is to say that somebody, here are 3 things that you should do, and this is the most important one. And if you do this, this is the reward that you'll take. And if you take the reward, this is where you can fulfill it. We're trying to make the experience very simple. Behind just the ability to do that is great complexity. So I lifted the lid on showing you some of that complexity. But our focus is very, very clear that the experience through the person, through a very effective product and through a very effective user interface should be very simple. And what we will build in the background, though, is the ability to evaluate that all the time to see how people react to it. We have a strong focus also in ensuring that the outcomes that we achieve is fairly shared between the person, between the book of insurance and the other policyholders and obviously also the investors in the business, but that is a strong focus of that optimization module. We're talking a lot about the fairness of what we're saying, all of this is additive to the elements of the program that people are used to. And all of these additional things that we will say to change people's habits will be additive to what they basically have already. I hope that answers your question.

Great. Thanks, Emile. I understood the live stream might have gone down when I was asking the question. I'm going to repeat the question. With hindsight, you can refer back to it was. But are you concerned about the risk of increased complexity in the reward system, which could drive customers away. But again, this session is being recorded and will be available on our website for any viewers. I know we're now fully back online. I'll move on to the next question. It comes again from Michael Christelis from UBS. It's linked to the previous question, and it relates largely to the U.K. environment, and I'll, Neville, ask you to come in here. Is there a regulatory risk of customers not understanding the product they're buying, particularly in light of the FCA's consumer duty regulations around fair outcomes. Does a customer know what his premium could be in, say, 5 years' time? Also just sorry, before we move over to Neville, apologies. We will be having a further Q&A sessions later with a detailed U.K. deep dive. But Neville, over to you.

Thanks, David. I think from a consumer duty perspective, the issues around price and value as well as customer understanding and customer support are something that we've embedded within Vitality even prior to consumer duty. There's complete transparency, customers have a significant understanding of the product through all the mechanisms that we've put in place as well as on the quotes customers understand that their premiums can increase over time and that's obviously a function of whether they engage in the Vitality program or not. So we are not concerned about that at all. In fact, we see consumer duty as a very positive step whereby we are able in the U.K. to actually demonstrate much more value because of the Vitality program over and above the underlying insurance benefits. So we are very, very comfortable. We also have a very stringent program around our intermediaries and their ability to articulate our products and get accredited to sell the product. So there is a significant amount of guardrails in place to protect consumers and get them a clear understanding of the benefits and how these manifest over a period of time.

Thank you, Neville. The next question comes from Justin Floor from PSG. The question, I will pass this question back over to Emile. Do you have an estimate on what the implementation of hyper-personalization and individual pathways could have on longer-term embedded value creation versus the current status?

So we're very optimistic based on what we have seen already. Maybe just to say the answer is to an extent that it does depend. It depends on how much engagement one already has in the market and the dynamics behind the products and basically how you split the value between members and the book. But effectively, on implementation already what we've seen even before we have the full functionality of the hyper-personalization in place, about a 13% uplift in the U.K. in embedded value. We see that going up significantly as we get more of the functionality that I've put on the screen in place. So I would say that for our markets in general, anything between 10% and 30%, depending on the circumstances that we find in that market and the level of engagement in there already. But I hope that gives broad guidelines. I think in the end, it does depend on the effectiveness of how it's implemented in the markets and when it comes online, and all the functionality built into the product at that point.

Thank you, Emile. Moving over to a question from Matthew Pouncett from Laurium Capital. The question is when will the personal pathways offering be rolled out to clients? Is it currently live? I think there's evolutions of that. Adrian, if I can ask you, just to give a high-level view of where we are in the personal pathways rollout.

David, it's a complex rollout. I mean, we have it in South Africa, and it's in a beta test that's happening now. So about 2,000, I think, of our own people on the Discovery Health Medical Scheme are using it. And that by 1st of January should go live to the entire membership base. So in a pretty sophisticated form in the way that Emile spoke about clinical habits, et cetera, all of our clients on the Discovery Health Medical Scheme should have access to the hyper-personalization. . Our U.S. business, and Jon is going to talk to that later, is also offering their product based on the same structures to health plans in the U.S., and you'll hear about that later. Neville in the U.K., a lot of work is being done where we're offering a very hyper-personalized exercise piece in the life product and the health product to apply there. And that is kind of rolling out now. So it's coming out in different forms. One of the exciting pieces for us, of course, and I think Shaun will touch on that later, is how that plays out across our partner network over time. That takes time, the system into operability, the ability to call the different modules, et cetera. But I'm hoping over the next 18 months, we've got kind of a change of pace for the group, and the hyper-personalization is kind of embed in what we do. There's a lot to do here. Thanks, David.

Great. Thank you. I think I'm going to call it at this stage. There are 1 or 2 further questions. We will be breaking into further Q&A through the rest of the day.

For now moving into the next section, which is, as we spoke about the Vitality Global business, as this was previously known. And we'll start off with the first session from Shaun Matisonn on Vitality Network. We'll then move into the Shanghai offices into Shanghai Tower, with David Ferreira and Candy Ding, and we'll angle for Jonny Broomberg, the CEO of Vitality Health International.

Thank you, David. Welcome again, and apologies for the earlier inconvenience. For many people who did miss the presentation, I'll return to the beginning and discuss Vitality Network with you. As Adrian alluded to earlier in the day, the vision of the Vitality Network is a very simple but powerful vision. Our vision is to take the shared value insurance model and work with leading carriers around the world to transform the provision of insurance business and, in turn, have a profound impact on millions of customers' lives. But in order to deliver on this vision, we need to take advantage of the decades of assets that have been developed across the Discovery Group. So over the last number of years, we've created a platform utilizing these assets that is reusable, deployable and configurable to insurance partners around the world. I wanted to focus on 3 elements of this platform. The first is the product that we provide to our partners, and this manifests in 2 dimensions. The first dimension is that of shared value insurance. which, as Adrian and Emile alluded to earlier on, we have increasingly understood the inefficiencies in the market and the data and the causative effects have allowed us to develop more appropriate and more sophisticated and more sustainable insurance solutions with our partners. And so we continue to go through a process with each one of our partners around the world where we customize shared value insurance solutions, taking account of underlying product dynamics, regulatory requirements and, of course, the emerging data. The second element of the proposition is that around the Vitality program, which today, by and large, manifest the consumer on the mobile phone. And the mobile experience is central to making sure that we can deliver solutions that are highly engaging, deliver behavior change and ultimately unlock the benefits of personalization that we were discussing earlier. To take advantage of this, we've built a sophisticated health center design capability that continually test new changes to the user experience from customers around the globe. So we can make sure that each element of our user experience is both livable, findable and usable because at the end of the day, that ultimately defines the success of the program in terms of driving out engagement and delivering value. The second element of the platform that I wanted to unpack is the reward network and the ecosystem that we continue to build. This manifests in 3 layers, local partners, regional partners and global partners that none of us in the network could build alone. As we build this network and ecosystem of partners, they impact the proposition in different ways. The first example is around behavior change and motivating change. And we've learned that what is critical to unlock behavior change is motivational, highly aspirational hedonistic behaviors like travel. And so over the last 12 to 18 months, we've deepened our partnership with Expedia to provide global travel solutions through all of our underlying insurance products, and we continue to work closely with Expedia to improve and enhance the benefit. The second layer on the ecosystem is around devices. Devices are central to the management of the program and are becoming increasingly sophisticated in their data they collect, both around physical activity, V02 max, sleep all of these important data points drive personalization and the effectiveness of the program. But in turn, many of these devices like with the obvious example being Apple are, of course, both aspirational and motivational in their own right. And the third is we've seen real progress in the digital health space, with examples being Headspace, a critical partner of ours, which are really pioneering mental well-being solutions across the mobile phone, and what we're able to do with our partnership with Headspace is provide increasingly sophisticated and personal solutions to our members to help with their mental well-being journey and improve the engagement and ultimately improve the underlying behavior change. This platform and data that we've spoken about is ultimately delivered to our customers through technology. And so as we've spoken about over many years, we've redeveloped the entire Vitality stack on what we call our V1 platform. which is specifically built for the business that Vitality network is in to build deployable, reusable and configurable solutions to provide the platform to customers around the world with different needs for local market activities, different languages, et cetera. And so we've undertaken to rebuild this platform using a modern micro service architecture really thinking through the nature of the business we're on, taking advantage of years of learning of legacy platforms around the world. And very excitingly, what we've seen over the last number of months is the use of AI to improve the rollout of the technology and the deployment of solutions faster and more efficiently and more accurately to our customers, the first of which is in the business of translation which has always been a difficult and problematic area to roll solutions out quickly. As we've seen enhancements of AI, we can deploy new translated solutions in a much quicker way, in a much more accurate context-driven way, which is very, very powerful. And the second dimension of which AI is incredibly helpful is around testing. With the complexity of the platform and the solution and the local market activity, a significant investment in automated testing, make sure we continue to meet our zero defect requirement as well as being able to make changes quickly and effectively. The entire platform is designed in pursuit of delivering the shared value business model that we've been speaking about to our carriers. And we provide the model which is consumed by and large, in full by many of our partners, but certainly can be pursued consumed with different parts of the model. And what happens with our customers as they implement the shared value insurance model, is we create value for them in 3 primary areas. The first is by creating more aspirational propositions by creating more engagement, which leads to more cross-sell, more repurchase. We see significant uplift in terms of new business. The second is in terms of improvement in actual performance through improvements in persistency, improvements in claims experience; again, we see a value uplift. And as we're rolling out more and more of the personalization engines that we've spoken about earlier, we're seeing further improvements in the value creation and the value uplift. This value creation is obviously offset by costs. Costs manifest in 2 dimensions. The first is the fees paid to us for licensing and services of the IP. And the second is, of course, the investment that our partners make in the rollout of shared value insurance in the local market. After those costs, we see based on our own experience and the emerging experience of our partners, a 60% to 100% uplift in VNB. And the second element of our revenue is a share of the value uplift that we create principally measured around the new business written on the shared value portfolio and the members, but in many instances, enhanced ultimately as the performance start to emerge. As you know, the model has been in place for many years, and we're seeing real tangible evidence of success in terms of high level of engagement across the globe, real evidence of the improvement in actual dynamics in terms of lapses and claims and delivery of the value uplift that underpins the shared value model. As a consequence of this, as we reported in our last reporting period, the Vitality Network business is starting to emerge with a 23% increase in profit. We've seen API, total value of shared value insurance policies written around the globe grow by 11% over the last year, revenue by 10% to just over $100 million and a 17% increase in insurance partners. This has created a network around the world of some of the leading carriers importantly creates a footprint that gives us access to 70% of the world's addressable life insurance market. We have over 300,000 agents and advisers distributing our products around the globe, of which 230,000 of those are tied, really driving the business forward. And so the economic model for the Vitality business is relatively simple. Working with our partners and new partners around the world, growing the penetration of the shared value business model to improve revenue growth, to drive revenue growth at our target of 15% per annum, continue to use the platform and the work done on hyperpersonalization to improve the proposition to improve engagement and behavior change to create improved competitive advantage and ultimately, new business outlet and taking advantage of the material investment we've made in the platform to date, we believe we can keep the -- take the advantages and the benefits of the scalable platform to keep our investments and expenses under control, so we can unlock an operating margin of 50%. Let me focus then first on revenue. The share value revenue, as I've discussed, manifests us in 2 key dimensions: licensing fees for our IP and services that we provide and the implementation of the share value engine and secondly, a share of the value uplift, which is principally a function of new business API membership, but in many instances, we see enhancements in that in terms of performance fees or experience emerges. The key drivers of this revenue, understanding our partners, the market share that they have, the extent to which they're embedding the proposition, the product lines that they're integrated into the penetration that they're receiving, the actuarial dynamics and engagement, which leads to tangible evidence of repurchase and cross-sell. And of course, all the activity that they are undertaking to grow the revenue. And that has manifested in what we've seen so far as we've built the foundations of the business in terms of revenue in excess of $100 million. And today, an operating profit margin of 28%. What you can see, though, is a diverse stream of our revenue with 3 primary jurisdictions driving the majority of our revenue; Japan, Asia Pacific and North America, with emerging revenue sources from other parts of the globe. And what I wanted to share with you now is what's taking place in all of these different regions to give us confidence that we can meet our target growth in revenue. Let me start with North America, the largest life insurance market today where we have 2 anchor and critical partners in John Hancock in U.S.A. and Manulife in Canada. John Hancock operates as a critical player in the U.S. life insurance market, offering dominant position in the universal life insurance market. Manulife is one of the top 3 players in Canada. And as you can see, life insurance penetration rates in the U.S. are particularly low, offering large opportunities for growth in the life insurance market. Our partnership with John Hancock began in 2015. But in 2018, we embedded the Vitality Go solution, not dissimilar to what Neville spoke about earlier, which is a lighter version of Vitality program, which is embedded in all John Hancock individual life policies sold across the U.S. every single policy has a version of Vitality Go and customers can choose to buy up to the full shared value insurance as they purchase Vitality PLUS. We've rolled out a similar model with Manulife in 2021 and 2022. And what this has allowed us to do together with John Hancock and Manulife is make sure that we're all in on the shared value insurance model. And this really means that we can work together to own and create the category of shared value insurance in North America. This manifests in many ways, most recently, just a few weeks ago, John Hancock hosted their second, longer, healthier, better longevity symposium, where they brought together leading speakers from around the U.S. and together with their key distribution partners and other leading stakeholders in the U.S. life insurance market to both share with them cutting-edge thinking and to continue to maintain a leadership position in the provision of share value insurance. This has manifested in most recently, 26% growth in revenue with regard to new business sales. We have seen in 2023 in a high interest rate environment some stresses in universal life sales, but we've seen a return to substantial growth. Our continued growth in membership of 14%, high levels of penetration that we continue to work with John Hancock to enhance in the U.S. and real opportunities for growth and improvements in penetration in Canada. Very importantly, we've seen real evidence and manifestation of improvements in those actuarial dynamics; improvements in cholesterol, BMI, real evidence, tangible evidence of behavior change to our customers in the U.S. And John Hancock and Manulife have been very disciplined in continuing to enhance and improve the proposition, most recently, we rolled out a partnership with Adidas, enhancing the benefit offering, offering substantial discounts for healthy gear to our customers around the U.S. and we've further enhanced the customer experience. And so we feel, together with John Hancock that we really are unlocking the shared value promise in terms of the value creation. And so we have very bold and ambitious plans to grow in the U.S. life insurance market. Together with John Hancock in the markets in which they have a dominant position, we are pursuing an aggressive and bold, ambitious plan of growth to focus on new areas of distribution, continue to improve the product, add new features to the product to grow where they have a dominant distribution position. And then to look together with them in the individual life market, how we can create partners around the ecosystem to drive growth in segments or distribution areas where they currently do not have the presence. In addition to that, the fastest area of growth in the individual U.S. life insurance market happens in the voluntary benefits space. So we are working independently to find new partners in that ecosystem to really drive the growth on the back of the success that we've had in the U.S. life insurance market. All of this gives us a high degree of confidence that we can continue to grow revenues in North America by 15% per annum as per our targets. Turning to Japan, the third largest life insurance market globally, where we have an extraordinary partnership with Sumitomo Life, whose roots go back almost 400 years in Japanese history, as you know, Japan is one of the highest penetrated life insurance market globally. Sumitomo have a market share of approximately 5%, but they are really all in on Vitality. We have created sophisticated shared value insurance products across their suite of protection products only last -- only in the last couple of months, did we roll out a new critical illness insurance product and we continue to work with them to implement the shared value insurance model and focus on the sophistication of how we can make sure all of those inefficiencies are completely removed from the system. Sumitomo have backed their commitment by significant investment in sponsorships around Vitality, making sure they embed the philosophy and methodology of shared value insurance and Vitality throughout the workforce, opening flagship stores in both Osaka and particularly in Ginza, putting Vitality really in the front and center of their activities and in the minds of consumers and agents. Together, we're very proud of the results that we've seen in terms of growth of premiums, growth of members, and we maintain very significant ambitions in terms of growing our membership. But most importantly, we're already starting to see changes in morbidity rates, mortality rates, high levels of engagement. But what we're also excited about with Sumitomo is that they are creating new and innovative ways to roll out the shared value model. They, as you know, have an agency distribution force. And one of the ideas that they had pioneered is to take a stand-alone version of Vitality on a limited basis, in a limited amount and provide it to their agents to share with customers. The consequence of this is that we've seen conversion rates increased by almost fivefold. And this has provided us with a powerful tool as we think about growth ahead. So together with Sumitomo, we're very confident that we are unlocking the shared value promise. But as you know, they have put out there that we currently have over 1.5 million customers on the platform in Japan. We intend together with Sumitomo by 2030 to grow that to 5 million customers. So we are working very hard with them to create significant investment in the shared value insurance model, looking at new product lines, new distribution opportunities, taking advantage of opportunities across the broader Sumitomo ecosystem and group of companies to make sure that we can deliver on that 2030 target, which in turn, for us, gives us a high degree of confidence that we can meet that target of 15% growth per annum. Turning to our partnership with AIA across the Asia Pacific region. As you know, AIA are the largest publicly listed Pan-Asian life insurance company. There are different levels of penetration across Asia but we're involved in 11 markets across Southeast Asia. And although our partnership is over 10 years old, we continue to expand and only during the course of last year did we roll out into India in partnership with Tata AIA. So our focus with AIA is to integrate the shared value insurance product across multiple lines of business in all the different markets that they operate. Of course, within each market, there's different emphasis on savings and protection products and different levels of integration, different levels of distribution, which means there's lots of room to continue to add new product lines. But underpinning AIA's commitment to shared value insurance is their brand promise of living healthier, longer, better lives, underpinning everything that they do and the manifestation of that brand promise is Vitality and shared value insurance. And so while we had certainly some limits on growth during COVID, we're starting to see growth return in terms of a 21% increase in annualized new business premium, 18% growth in membership and an aggregate penetration of 22%. Importantly, we're seeing again, real evidence of the actual dynamics being achieved across Asia. But one of the aspects that's most interesting about the rollout with AIA is the impact that it's having on agency distribution. We see real increases in repurchase as far as agents are concerned, and it really provides a powerful tool to attract and retain high-performing agents, which is a tremendous asset across Southeast Asia. So together with AI, again, we have a high degree of confidence that we are delivering results as far as shared value insurance is concerned, and we again remain committed to continue to grow as AIA grows as insurance penetration grows within the region. And again, we feel confident that we can achieve a 15% growth in revenue going forward. Turning to Europe. We have 3 partnerships in Europe. The first is with Generali across 7 markets across primarily Central Europe, and then in Portugal with MultiCare, Fidelidade and with ASR in the Netherlands, we have recently expanded their footprint with the acquisition of Aegon. Obviously, the rollout in Europe has been mixed, with different levels of penetration, different levels of embedded or not embedded as a result of different regulatory restrictions. We are very proud of the results that we are achieving with MultiCare and Fidelidade. And really, we've seen exciting results with ASR, which I'll talk about in a moment. But if we turn to the impact of what's taking place with Generali, focusing on 2 of their key markets, Germany and Austria. In Germany, their most important individual life insurance market, underpinned by the distribution force of DBAG, we're seeing real evidence of improvements in persistency and claims underpinning those actuarial dynamics. And in Austria, where there are really significant regulatory restrictions on the use of Vitality to being a powerful tool to create engagement and cross-sell opportunities for the Austrian business. So while on the one hand, we do see the results of shared value being delivered as far as Generali and the European business is concerned, the results have been below our expectations. So we haven't seen the same growth as we've seen elsewhere in the world in terms of new business and membership and different levels of engagement and penetration. So we continue to see growth rolling out very successfully in Portugal. As far as the Netherlands are concerned, we'll be expanding the reach of the Vitality program from the beginning of 2025 to embed it into more products, and we continue to take advantage of their footprint as they embed the Aegon acquisition. And then with Generali, together with Generali, we are systematically improving the product and the mobile experience across all of their markets in 2025 to reinvigorate the growth and make sure we capture the opportunity that Europe presents to all of us in the ecosystem. Turning to Latin America. We have 4 partnerships, BBVA in Mexico. Saludsa Seguros Equinoccial in Ecuador, and then together with Prudential, we have partnerships in Brazil and Argentina. As you know, Prudential have recently disposed of the Argentinian business, and when that transaction is completed, we will continue to roll out the solution with their local carrier GST. And so while we've seen real emerging evidence of growth, particularly in Ecuador, which have been an extraordinary partner for us, what we're also seeing is that Prudential -- together with Prudential, we've created a fully funded ecosystem under the brand fully, which allows us to provide the solution to other insurance partners, particularly across Brazil and other areas of LatAm. And so together with the activity that Prudential are carrying out and together with Hannover Re, we continue to seek new partners across LatAm which we believe will be a significant driver of growth into the future. And then to conclude with the Greater Middle East. We have 2 important partnerships in Pakistan with IGI Life and in Saudi Arabia with Tawuniya. Of course, these are markets with low levels of penetration. But we've seen real growth in market share as both of our partners have rolled out the Vitality solution both of our partners, we enjoy very, very strong and positive relationships with where we've seen real evidence of improvements in the proposition, both of them continue to win awards and most importantly, when we talk to Pakistan, are winning new and important banking distribution contracts that they never had access to before. So when we look across the Greater Middle East, we really are seeing growth emerge, and we see real opportunities, particularly with Tawuniya to see substantial revenue growth in the years ahead and to use this platform to expand with more partners into the Greater Middle East. So overall, we remain confident that taking advantage of all the activity with all our partners, the diversified data of our revenue stream, the tremendous road map ahead or runway ahead of new opportunities to pursue that we can continue to meet that revenue growth target of 15% per annum. The second element is to make sure that we can continue to deliver a solution that brings to life all of the personalization benefits that we spoke about earlier and continues to create competitive advantage for us and our partners. So as we've said, we've made real and substantial investments in the platform. Today, the platform can be deployed into a new market in 3 months. More importantly, it allows us to roll out new features to our partners in a much more efficient way, which allows us to operate low cost, more accuracy and more quicker enhancements to our customers. But we've also made substantial enhancements in the segmentation under the platform. Remember, in order to unlock a hyperpersonalized solution, we ultimately have to deliver customized individual solutions of the program at an individual level, and the platform has been architected to do that. So we see, as we roll out improvements to the member experience improvements in underlying engagement, all driving uplift. The platform has the highest level of security as high levels of uptime is literally dealing with billions of transactions. We have 8 instances of the AWS cloud deployed around the world to manage the platform. We've seen over the last year as we've become more sophisticated, more experience in the tooling that we've created, a 37% improvement in developer productivity as much of the code is model driven, and also through working with independent reviews, we've seen that the operating model, underpinning the deployment of the overall platform really is best-in-class. And the technology stack is rated by independent expert is really starting mature. And as Adrian mentioned earlier, we're using the V1 platform to provide these personalization benefits to other elements across the Vitality Group, where we still have legacy platforms, and we're taking the mutual nature of the solution and using that to slowly enhance the proposition and the technology stacks out there in the rest of the world. So we feel confident that we are able to deliver those hyper-personalized solutions to enhance the competitiveness and the shared value uplift. So then let me conclude with the expenses underpinning the business. Expenses have started to plateau. And as you can see from the pie chart, the 2 primary drivers of our expense space are technology and then what we call market localization and support. The technology investment, we believe, is more than sufficient to take advantage of this mature platform to continue to develop the benefits that we've spoken about earlier. And as the platform has become more sophisticated, more mature, we can either roll out more benefits for the same amount of money or we can start to reduce the localization and support costs. So from a very simple point of view, we are targeting revenue growth of 15%. We're endeavoring to keep the cost base stable given the maturity and investment we've made, which allows us to target an operating margin of 50% as we look forward into the future. So thank you for your attention. To summarize the investment case, we believe that traditional insurance models are inefficient because they do pull controllable risks, but we have in the Discovery shared model and ability to deal with those inefficiencies to create a new category of insurance that's much more efficient and provides a much better value for money for the customer. We have built, over the last number of years, a global network of partners giving us access to 70% of the world's life insurance market. This allows us to provide real assets and real shared value uplift to our partners giving us tremendous opportunity for revenue growth and using a stable platform will unlock significant margin improvement as we continue to grow the business. Thank you very much.

Thank you, Shaun. I appreciate the depth. And again, for all listeners online, we hope all of you were able to receive that clearly. Certainly, we believe the technology issues have been resolved now. And so we'll move straight into the next session. We're going to move across the globe to Shanghai, where we will be received in Shanghai Towers by the Vitality China CEO, David Ferreira; and the Ping An Health Insurance CFO, Candy Ding However, before we cross over to them, we have an important message from the CEO of Ping An Health International [ Juul Wu Jun ].

[Interpreted] Thank you, David, and thank you to you Wu Jun. And since it is nighttime here in Shanghai, I'm going to go ahead and say good evening to all of you wherever you might be. So Candy and I wanted to start off this evening today by just giving you a picture of the policy and regulatory environment that relates to our health insurance industry here in China. And the headline I think, is the following, which is it is a forgiving and progressive environment. For those of you -- particularly those of you who are not familiar with China, while state provision of health care as well as state funding of health care, are the dominant feature of the system and are expected to remain so, nonetheless, there is a very welcomed and important role for the private sector, both on the provider side and on the funding side. And indeed, the relationship between public and private is a symbiotic one rather than a bifurcated one that you observe in some other countries. And so the fundamental idea is that the state is committed to continue to provide a certain level of health care for its citizens and to provide the funding that enables access to that health care, but that where citizens want more and can afford more, which is increasingly the case as China prospers that they are encouraged to access private sector funding and private provision. And the State Council, which we referred to on this slide is the equivalent here in China of the cabinet in the U.K. or the United States these new policies that we allude to, the guidelines that we recently published are just the latest chapter in a long book of policy support for the private health insurance sector, and they include measures encouragement such as asking health insurers to take care also of the health and wellness of their customers, which is very much in our DNA and in our business model and encouragement for closer integration between the social health insurance system and private health insurance, which as you will see a little bit later, is very much a feature of the landscape here as well as of our business. So against that policy and regulatory backdrop, of course, the demand for health care services in China is also growing. And you can see in the bar chart on the left-hand side, just the percentage of GDP creeping up, that is continuing to happen at a gentle pace at the moment. In the middle column, you can see that the drivers are similar to those that we observe elsewhere, especially in industrialized countries where you get an aging population generating of itself, more demand for health care, but also as you have an increasingly affluent population, the relative proliferation and preponderance of noncommunicable diseases. So these are driving demand for service, on the far right-hand side, what we're pointing to is that there is ample opportunity and challenge for the public and private sectors to collaborate in solving these challenges, but also, of course, taking advantage of this opportunity from our point of view. So some of our core products are fit into point one that you see here on the far right-hand column, which is really a high-value product that is in essence, in my words, covers me as a citizen against tail risk. It's the kind of risk, which if it occurs, would probably not be -- would not be covered by social health insurance, could be very adverse event for me and my family is relatively unlikely to occur, but it is very good for me to have supplementary other in case it does, so that is a high-value product that is part of our range of products. On number 3, you can see the point expanding market reach. And just one striking example that I'd like to is an example that really struck me when I first came to learn of it, is a product range called [Foreign Language] and [Foreign Language] loosely translated, means insurance for the people or benefiting the people. And if you imagine this, each Chinese citizen has -- you have social health insurance cover, which you carry in your social health insurance app on your cell phone. And if you have accumulated unspent funds and unspent balance, you have the opportunity to spend it to acquire low-cost top-up private health insurance cover using those funds and distributed via your social health insurance app. So you have this excellent situation where you have the state using public funds that are unutilized to enable individuals to access at low cost very high-value private health insurance and bringing them into the world of private health insurance. So, it's no surprise, I guess, given what I've said so far that we really believe that the prospects for China's health insurance industry, which have been excellent over the past years will continue to be excellent going forward. You can see, again, if you look at the column on the left, just the absolute numbers here now. And by the time we get to the 2035 projection, you can observe here that the total health care expenditure in China is expected to exceed USD 2 trillion, which is obviously -- that is a significant market. In the middle column, what you can see is, unsurprisingly, private health insurance is growing asymmetrically. It's growing, its proportion of our total spend significantly over the years to come. And that is unsurprising because, on the one hand, fiscal expenditure -- state expenditure on health care is constrained to some extent by design. And -- but on the other hand, you have increasing -- affluent increasing disposable income and of course, an increasing propensity to spend on health care. And so you really have 2 outlets out of pocket or private health insurance and private health insurance for reasons we're familiar with all over the world is benefiting from that trend. If you go to the far right-hand side of the slide, you can see that Ping An Health Insurance as a company has been able to do exceptionally well. And some of the reasons will become clear, hopefully, a bit later in the presentation in terms of taking advantage of that opportunity. And so certainly, over the last several years, it has been able to grow significantly faster than its competition and so therefore, has been able to consistently increase its market share. So the final slide in this chapter, I will come back a bit later. But for now, from me before I hand over to Candy is to say, we started on this journey with Ping An -- in the Ping An Health Insurance joint venture in 2010. 2010 at the pace that things move in China seems like centuries ago. And back in 2000, Ping An Health Insurance was actually essentially -- well, it was a young start-up-ish company, and just getting going focused on the high-end, focused on building the brand, and then over time, that has changed fairly dramatically, fairly quickly and in a very positive direction. So the company went through a period between sort of 2016 and 2020 of releasing these mass market products that I kind of alluded to earlier, particularly the [ iYunbao ]range of products, which is still a very important part of the offering and getting significant scale of customers and then started going into a period of developing differentiated services health and wellness services and very robust expertise in core capabilities required by a world-class health insurer to the point where today, we are really -- this is a mature company with very serious capabilities and significant achievements under its belt. But amongst other things, it is now leaning heavily into a shared value business model where it is able to conduct its business by effectively looking after the health and wellness of its clientele. So this is -- we're at a very exciting point in the company's evolution. And where, as I mentioned earlier, the product range and the distribution channels are significantly diversified and the company is well positioned. Now within that, from a Discovery perspective, we have looked to evolve our own collaboration within the company to be able to add value as a value-adding shareholder as time goes by and as the circumstances change. And this has also been just an incredibly exciting journey that I feel privileged to have been part of together with my Discovery colleagues and it decided back when the joint venture was first entered into by, if you imagine, basically discovery taking as envisaged some of our core capabilities and IP and seeking to transfer them into the Chinese environment into the Ping An health insurance environment when the company was just getting going. But of course, then things moved on. And so by the time we hit 2020, we were able to move into a mode where really the company itself was looking to develop and embed significant capabilities, and we were able to then use our team of expert in Shanghai and other colleagues to join up in working teams, project teams with people who work for Candy and other colleagues in Ping An Health Insurance and deliver jointly projects that manifested real capabilities, real product, real systems and so on. And we continue in that mode now delivering these joint projects in the tranches kind of day in and day out, mainly in the areas of product and actuarial -- product data and actuarial in claims and risk management and in health wellness -- and health and wellness think Vitality essentially. So now we're at the point where we continue to do that. But the company is of such scale and of such capability that really the image that I would like to leave you with in terms of where we are now is captured in the acronym B2B at the top right-hand side of that slide, which is it is really a relationship of equals. And by equals, I mean, 3 equals yes. We have the significant -- we're lucky in Discovery to have these 3 significant health insurers in the family. So we have Vitality Health in the United Kingdom. We have Discovery Health in South Africa, and of course, we're fortunate to be a 24.99% shareholder in Ping An Health Insurance here in China. And those -- if you think of those, it's a family of companies that are now able to in a practical sense, talk about what the future holds in terms of opportunities and threats, planned for that future to collaborate around not just the ideas, but also the development and the deployment of capabilities where there are ways to leverage off of each other's relative strength. And we are at an exciting point in the partnership, I would say, a very strong point in the partnership with an extraordinary partner in Ping An group. And then as I say, the company as a business matter in terms of the capabilities that is developed and the financial results that it is showing through excellent management is itself at a very exciting point, which is exactly the point where I am going to hand off to my friend and colleague, Candy Ding. So Candy, over to you.

Okay. Thank you, David, and good night, everyone. So I'm very happy to share what we have done in the past few years. Health business is a very special business line in the insurance market. So we are always aiming to be a leading health insurance company in China in this country. So to be a leading company, we need to accumulate the capabilities. So that's why we do invest a lot to build up our capability. From the left side of the slide, you can see this is our app. We really invest a lot on the design of the app and we iterate upgrade our app nearly every quarter to make sure that our clients can use it very easily. And they can access all the products through the app and the service are also accessible to the clients by the app. And also, we provide a lot of health care products, which can also be accessible by the app. And in addition to the app, we also do a lot of investment on the system building up and also the network buildup. We developed our HIS system, which is a Healthcare Information System. This is HIS hospital -- every hospital has the HIS system. And we are -- we're doing internal system to directly connect HIS system in the hospital, so that we can easily to do the one-stop claim management and to provide very direct service to the client in the hospital. And also, we now build a strong network with the hospital. We covered nearly all the top 100 hospitals in China so that we can provide our clients with very high-quality medical service to them. And in -- on the other side, Ping An, also own our own hospitals. So we have in-depth collaboration and relationship with our own hospital, PKU Healthcare Hospital, so that we can design some products directly to those clients to that kind of hospital. And also, just like David mentioned that we are just the -- country just launched a new policy on the insurance which focus a lot on the health insurance products. So which -- actually, we are ahead of the policies. We do design a lot of innovations on the product and we closely integrated health care management service with our insurance component in our insurance products, so which is quite ahead of the policy. And also we are leading the innovation on the product design. And for each product, we provide health service and also we provide different benefit to meet the need for different client, like low-end, middle-end or high-end clients so that we can satisfy all the needs from our clients from different areas. And also, we provide real-time health management tool, so which we can let our clients access our product and access our service very quickly and easily. And also, we have some claim process, AI claim processing. So our clients can get the claim payments within several seconds. So this is very fast and efficient compared to our peer companies. So this is our capability, we are building up in the past few years, definitely with the support from our partnership Discovery. So we hope that through the accumulation of our capability, we can continue to provide high-quality service to our clients. So next slide, in addition to the capability, we are also -- do a lot of efforts on our distributions. So the next slide shows that we have the branches in most of the first tier and second tier province in China market. So we can cover most of the population who can afford the commercial insurance products in China. This is our -- most of the distribution of our branch, and we continue to expand our branch. And in addition to the branch, we also have a lot of -- we have our own app, our direct access to the online clients. And also, we have our own agency force so we can provide the products online. We can provide more detailed industry introduction to our clients on our product and service. In addition to the own sales force and app, we also work with our third party to use their -- to fully utilize their resources to help us to sell our product. For example, Alipay, we have very good client base and also their operation access to the client is quite good. So we design the product for those kind of clients, which -- who are very young and who distribute, maybe in the third tier or other cities, which we cannot cover through our agency force. And also, we work with Mingya, who have very high level of agents, then we can distribute our middle and high-end products through the broker. And also, we work with like we share iYunbao, all those kind of online brokers who have a large client base to help us to distribute our products and service. And with the channels distribution, we also do a lot of efforts on the operations. That's why we have very superior operational performance compared with our peers, which is coming from our capabilities. And also we do a lot of efforts on claim management, risk control tools. And also, we continually develop our underwriting tool from simple underwriting and smart underwriting to meet different needs of the clients. So that's why we have a quite good performance over the years. And next slide. And this is our results of the core companies operation, with the culmination of the capability and with the buildup of our speciality and then with our diversified distribution channels, we achieved or we get quite good achievements over the years. On the left side, you can see that the operating profit is quite good over the years. Maybe the -- in 2022, we have a drop due to some stock market issue, but we will continue to grow -- we believe we can continue to grow, which can be found from the results and now we cover more than 27 million lives, which is a very big client base. And through the client base, we will continue to upgrade our product and service. We hope that we can upsell the products to those clients, then, which means we will have continued sales from the client base. And also the next chart is the written premium. We are undergoing very steady growth of the premium -- written premium and -- which is from our direct business and also our reinsurance business. And definitely, our net asset value is growing very fast, especially in the past 3 years, we are undergoing value growth with very fast growth of the net asset value due to our accumulation of the profit. And next slide. This is also a very good performance in the industry market. You can find that for the market share, we are continuing to occupy 10% of the market, though there are a lot of online business and also a lot of new competitors in the health business. But we are -- through our capability and through our product innovation, we can still maintain the level at -- even have a steady growth of the market share. And for the premium ranking, it is also -- we also have growth rank upgrade. So every year, we have a small improvement on the premium. But for the profit we definitely achieved quite a good performance. Now we are at 10 percentile of all the insurance, competitive insurance peers in the Chinese market. So from the premium and the net profit, you can find that we are undergoing high quality of the business though the premium growth is lower than the profit, which means we are just targeting high-profit business. We hope that we can continue the high-quality business so that is -- and that is our overall market position in the past 3 years.

Thank you very much, Candy. And I just wanted to focus your attention for a second on that very last point, the bottom right of Candy's last slide. I mean it is quite extraordinary. It's an extraordinary achievement that a company that is relatively young in a relatively new sector within insurance in China has been able to rise to 16th out of 161 insurers across insurance categories. So it really is quite striking. And obviously, we're very proud of that. And so I just have 2 more slides. This is the second last one, to speak to you a little bit about, first of all, the ambition of Ping An Health Insurance as a company. So his ambition is as stated, yes, to -- its vision is to be China's leading health and wellness driven specialist health insurer. And I would argue that, that is what Ping An Health Insurance is today. So I think the challenge is to build on that, consolidate that position, accelerate market leadership. And I think Ping An Health Insurance is well positioned to do just that. Again, from a Discovery perspective, as I said, we are a value-added shareholder. We work as hard as we possibly can to help Ping An Health Insurance to achieve that ambition and to fully manifest its vision to be a share value-driven insurer. And to put a different lens on the type of support that we provide than I did earlier, I would say that what we are really doing is seeking to help empower Ping An Health Insurance to do these 3 things that we described on the slide. So using our actuarial, our behavioral, our data expertise and experience to assisting on health insurance as it designs and proliferates innovative products and services that power this shared value vision. And secondly, recognizing the importance that we have assigned over the years to investments in data. So the collection of data, the curation of data, the analysis of data by very sophisticated methods and the application of that analysis throughout the health insurance value chain is an important area of focus. And then finally, as I said earlier, are really leaning into this being a family of health insurers that span different markets, but where those markets have a different -- if you look 10 years into the future, 50 years into the future, where consumers are going, where the competition is going, where technology is going, provide a lot of common threats and a lot of common opportunities. So confronting that future together is exciting and powerful rather than doing it alone. If you move to the right-hand side of the slide, I mean, this is in practice what health insurance is, therefore, looking to do at the end of the day. And Candy have alluded to some of this, which is to continue to lead the market in both revenue growth and market share by targeting growth that is 5% ahead of the market at least, to diversify the distribution model, the distribution footprint. And I would say also, as Candy said, the product range to reach different parts of the population, all in the interest of creating, preserving and maintaining high-quality earnings and high-quality earnings growth. And then finally, just as my colleagues have done to end off, on what is the investment case as we see it for Ping An Health insurance, and it is captured in these 5 lines here. So the first is evidently, China is a massive economy, the second largest economy in the world, but continuing to grow at a robust rate. Secondly, both the demographic trends as well as the policy environment will continue to drive significant opportunity. Third, Ping An is an extraordinary partner. It has, as I said, amazing capabilities, amazing reach and fantastic brand recognition and power and combined with our expertise, historical expertise and current expertise in health insurance, we are a powerful combination. Fourth, the proof of the pudding is in the eating. Ping An Health Insurance has consistently grown faster than the market over the last several years. It's a very well-managed company, and it has developed as we've said, significant capabilities in risk management, health and wellness and otherwise, as well as the differentiated distribution and product strategy. And so the bottom line is that we fully believe that Ping An Health Insurance is well positioned to continue to lead the market in innovation and to outpace the market and profitability and in the process fully benefiting from being part of the family that includes Discovery Health and Vitality Health. So I thank you very much for listening to Candy and me. I thank Candy for joining me. And [ Juul Wu Jun ] for his wonderful message at the top of this presentation. And from Shanghai, I bid you good night.

David, Candy, thank you very much for joining us. David, I know you've bid us good night. We're going to be -- David and Candy will be joining us later for a Q&A session. So we'll keep them up a little bit longer. But before we do that, we have the final session in this portion of the presentation. And this is around Vitality Health International, led by the CEO, Johnny Broomberg. I'm going to move over straight to the U.K. office to Johnny to take us through his business.

Thank you, David, and good afternoon, everybody, and thank you for joining us and for this opportunity to talk to you a little bit today about our Vitality Health International division. I thought I'd start by giving you a bit of background on some of the challenges across the global health insurance markets and the major opportunities that we think those provide to us. Populations are aging wherever you look across the world, there is a rising health care cost inflation, generally outpacing CPI. Health systems are fragmented leading to difficulties for customers in navigating their health care journeys. And in particular, as we look across Asia Pacific and China, we have low health insurance penetration and very favorable regulatory environments in which governments are encouraging citizens to take up private health insurance. So these do create both challenges but significant opportunities. And the technology stack and data science that we've developed in Discovery across the past 3 decades, lends itself very well to us having impact and operating effectively with partners in these different markets. So the stack manifests in what we call the health insurance value chain, you've seen us refer to in some of the earlier presentations. And as I walk you through the key businesses in the Vitality Health International portfolio, I hope it will become clear how we are and intend to apply both the technology and the data science to great effect with our partners in these different markets. Let me start out then with our joint venture with AIA across APAC, which we call Amplify Health. Just a little bit of background on the APAC health insurance market. It's a very interesting and challenging market right now. It's going through rapid change, moving from still largely paper-based to digital, products are shifting from being very simple often riders on life products to much more comprehensive specialized health insurance products. Distribution is shifting towards online. And we have a multitude of different health insurance systems operating there. So with this rapid evolution, there are real challenges in the market there are varying degrees of sophistication in the technology, in the coding, which is essential to operate health insurance widely varying capabilities in terms of data security and different requirements, variation in the investments in underlying technology and also importantly variation in the coverage and the sophistication on the provider side of the market, for example, hospitals and so on. So these things represent, again, both big opportunities but also some challenges in rolling out health insurance in this part of the market. Some of you will be familiar with our joint venture, Amplify Health with AIA. We set this out back in 2022. You'll be aware that AIA owns the majority stake of 75%. We have the 25% shareholding. Each of the partners brings unique strengths and capabilities to this partnership, of course, AIA is the insurance giants across all of Asia. It has a very powerful brand, enormous distribution. And as I'll show you later, a very strong market position in the major markets in health insurance. AIA will be providing the capital for this joint venture, is doing that. On our side, our key contribution is all of our health and Vitality IP a large number of our people have been deployed there. All of our data assets are available. There is no capital contribution from Discovery to the joint venture. And as we look at this JV, we've seen this emerging in 2 phases. Phase 1, we're just coming to the end of now, the start-up, transferring all of our critical IP. Amplify health building up the team there and starting to build its product suite and then the early rollout and deployment of those products inside key AIA markets. And now we're moving decisively into a second phase from now onwards, where the products are being built upon being built out and where there's much more rapid deployment, both within AIA and ultimately, outside of AIA as well. The idea here is to commercialize these data and technology assets across Asia. We're, of course, looking at private payers starting with AIA, but beyond that to other insurers as well, and then public in governments focused on consumers on pharmaceuticals and the med tech sector and health care providers, the large hospital groups, there are a number of strong consolidated hospital groups in different Asian markets. And all of these we see as potential clients for the Amplify Health joint venture. It's really a very large market opportunity. If you look at the market as a whole, it's a $4 trillion market across APAC with quite rapid growth. Significantly, over 30%, 34% most recently of total expenditure, health expenditure in that region is made out of pocket by consumers, and that's always a signal of a real opportunity to address health insurance to make health insurance coverage better, to make it more efficient and to assist customers in navigating health care journeys. And these are exactly the things that Amplify Health technology can do. When you look at AIA itself, it is -- the insurance giants across the region, both in life insurance and increasingly in health insurance as well. And if you look at the bottom right, in those major markets, it is the #1 health insurer, so a very significant opportunity as AIA builds out its health insurance presence for Amplify Health to support AIA in doing that. There has been very tight linkage between the technology that Amplify Health is building and the health care strategy that AIA is pursuing both building out health insurance, also integrating with provider assets and ensuring a wellness layer in health insurance and in response, Amplify Health has begun to roll out its suite of products to some key AIA markets. It has 6 solutions in various stages of deployment in 6 current markets operated by AIA. So some very good early success and a good foundation for accelerated rollout in the years to come. Amplify Health has full access to all of Discovery's health insurance tech stack, both what's been built historically and what will be built in the future. So significant amount of that IP has already been transferred. More will be transferred as it's developed. And then, of course, significant local adaptation is required in order to ensure that these products are suitable for the Asian market. As I mentioned earlier, Amplify Health also has access to the full Discovery data set. Emile gave you some details on that data, and that is proving very valuable in the Asian context already. Just a quick overview of the kind of product solutions that Amplify Health has been and is building. There's an underlying data platform. There's a health technology launch pad that its clients can use for their own health tech. And then on top of those, a set of products that are aimed to address the key problems that health insurers in the region face, including data analytics, modern claims administration system, including using AI to identify and manage fraud, which is a significant challenge in the APAC area. Then, of course, chronic disease management and full integration with the AIA Vitality deployment that my colleague, Shaun Matisonn, mentioned earlier. Just to give you a bit of a flavor for some of these products, and I'll do a quick deep dive on the provider management. One product is Insights Studio, which is a uniform set of data analytic tools that give health insurers the tools they need to understand claims trends to predict and to dive in and manage areas of risk in the claims environment. A Core Claims system. This is a modern, highly configurable claims administration system. It's largely developed off the back of the Discovery Health modern claims system with significant local adaptation. And then provider management, which is a key challenge in the APAC markets. This is the issue of managing claims coming in largely from hospitals, which are a key source of rapid medical inflation in that region. Just to give you a bit more of a flavor for that, there are a number of tools that are used for this. The tools firstly identify which are the hospitals that are posing significant challenges in terms of cost inflation and what kind of challenges are they. They empower the insurer then to engage with the hospitals in order to negotiate and manage those problems and then embed process and system changes to enable that to become part of the routine engagement with the hospital providers and finally, obviously, monitoring compliance and savings. And this manifests in a number of simple dashboards. If you remember, I mentioned earlier that some of these insurance environments are not that sophisticated, the tools that Amplify Health, therefore, needs to provide need to be accessible and easily usable. And this slide gives you a flavor for some of the profiles and dashboards that are provided to, for example, an AIA market, relative efficiency of hospitals, the specialists within those hospitals, how hospitals are using different medications, what discounts are being provided, et cetera, et cetera. When we look at typical impact of the provider management suite that Amplify Health is providing, this is what we estimate can be the impact on the AIA or external insurance client. So 7% to 10% lower claims arising from fee reductions and overall reductions in claims as well. So very significant impact in the context of relatively high inflation. So that brings me to the end of the quick overview of the Amplify Health JV. As I mentioned, it's just in the early part of its third year, heading into a second phase where we do expect a more rapid deployment of its tools, both inside AIA and beyond it into the APAC market. Let me turn now to our Vitality U.S.A. business. This is a business that historically has focused very strongly on providing our Vitality wellness set of solutions focused on the U.S. employer market, catering to a wide range of the employer market. We currently service over 500 employers with about 1.4 million employees. And the track record of Vitality U.S.A. has been very strong. We typically have much greater engagement than competitors in the market and much higher levels of member interaction and very strong impact on the business of our clients, so reductions in their claims costs. Bear in mind, these are often medium and large employers who are self-insured from a health insurance point of view, and therefore, in addition to the productivity impact, achieving reductions in claims cost hits the bottom line of our clients in a very positive way and very strong evidence of behavior change. So this has been a successful deployment of Vitality in the U.S. historically. Interestingly, however -- I am afraid my screen has frozen, and that's not letting me shift to the next screen. I will keep talking while we wait for -- to shift the screen. We have noticed recently a very significant trend in the U.S. market, which is towards consolidation among a number of competitors who've been operating in smaller, narrower verticals of the market for employers and health plans. So whereas the focus is, as you can see on the left of the screen, has been narrow wellness. What you have seen now is some of the competitors, through consolidation and through significant investment from private equity and venture capital, shifting to the right of this graph and offering other services that are closely adjacent. For example, navigation services for customers of their health insurance benefits and of their health care, providing coaching, both AI-powered and human coaching, disease and condition management and various other services as well. In response to this, we have started to make investments, and I'll give you some detail on that. But before that, just to make the point that this now turns out to be a very significant addressable market. So whereas the narrow wellness market, where we've historically played, is about $3.5 billion worth as one moves into the adjacent markets of care navigation and advocacy, condition management, virtual care, coaching, et cetera, you see that the scale of the total addressable market is vastly increased. And so our view is extending beyond wellness into these adjacencies is mission-critical for Vitality U.S. Some of our competitors, as I say, have already started to make those investments. And in response, we are making this investment as well. Our team there has spent the last 2 years rapidly building out a very advanced version of Vitality. We call it Vitality 3.0. It was implemented at the beginning of this year. We've also implemented a Care Connector platform, which allows us to join up both modern wellness together with care and benefit navigation, condition management, and we're also building out a coaching capability as well. Critically, we are pivoting from the narrow focus historically on employers to address the massive and attractive U.S. health plan market. This is the health insurance market. In the U.S., it's a multitrillion-dollar, $3 trillion market, highly fragmented with significant opportunity for us and we've started to have some early wins there, some very significant early-stage contracts that we've won, which we think augurs very well for our entry into health plans. This investment is relatively modest. We expect the business, which has been loss making for the last couple of years, to break even during financial year 2027. And as shown on the slide, we think the cumulative losses at an earnings level between now and then should not exceed about $23 million. So we're managing that very tightly indeed. It's a limited investment and we see very strong early signs of breakthroughs in the health plan market. Of course, there's a very rich technology and data asset stack that underpins the Vitality 3.0 platform. You've heard about this from my colleagues throughout the presentations today. The same does apply in the U.S. market. And so you can see there all of the assets and the partnerships that are applied in the U.S. market as well. As I mentioned, and as our colleagues have alluded to, from January 2025, we will also be rolling out the hyper personalized personal health pathways component of the wellness and care navigation program in the U.S. You can see many applications of this on the right of the slide. If I could just draw a couple to your attention, this will allow us to provide customers of both employers and health plans with chronic condition management services, for example, diabetes, and I'll show you an example of that in a minute. And interestingly and very importantly, we have a program to assist employers and health plans in managing their patients using the GLP-1 agonist on weight management programs. So this is something in very high demand now, and we are able to do this uniquely in that market in a hyper personalized way, integrating all of our wellness and other services with the GLP-1 treatment and a weight management program. So just to illustrate that very briefly, this will manifest as you've seen from my colleagues in a hyper-personalized app that will look unique and different for each member. There are the 2 rings, which the member attempts to close. As you can see here, this is a diabetic member. They get very specific recommendations on medication adherence as part of their health recommendations. There's also, of course, a physical activity target and they get specific guidance on what they need to do to earn physical activity points and how they're tracking there. And then of course, on the right, they are aiming to close their ring and to see progress. And so the app will give them very specific guidance and hence, as to what they can do to more rapidly close their various rings. And if I could just turn to our colleagues now to show you a short video of a journey of one of our customers. [Presentation]

Thank you very much. And if I can come now towards the end of the presentation on Vitality Health International, I would just like to share with you a brief background on our Quantium Health joint venture. This is the joint venture between Discovery and the Quantium Group. Quantium is a global leader in data science and AI. It has been operating globally, headquartered out of Australia, for over 20 years, currently has 1,200 people, including 800 data scientists and is headquartered, as I said, in Sydney, but operating in the U.S., in the United Kingdom and in South Africa as well, with deep insurance expertise, deep expertise across health care, retail and other markets as well. We formed this joint venture back in 2016 with the idea of developing assets together that bring together Quantium's AI and data analytics and data science expertise with Discovery's expertise in health insurance and health care and with our data assets. We formed this 50-50 joint venture with idea of serving both Discovery Group with its data science and technology needs, but critically serving external clients as well. The business provides data and AI strategies, analytics and data science. It has a flexible platform which is provided to new clients as well as a series of data products. It's had a very successful 8 years since founding, one of its major clients has been the Australian federal and state governments. It did a huge amount of work across Australia during the COVID pandemic. And so this joint venture really has been a great success thus far and has great potential. I thought I'd end by pointing out that we have leveraged the Quantium Health joint venture to develop the Wit.ai platform, which Emile Stipp, my colleague, referred to earlier. This is the platform that will span ultimately the entire Discovery Group across all our geographies sitting at top all of our underlying data warehouses and databases and allowing us to query, to utilize, to interact with our data and to do that right across the globe to leverage the latest machine learning and this hyper-personalized strategy, which Adrian and Emile [indiscernible] to. So we're very excited about this joint venture. it does have great potential. And with that, I will end the presentation on Vitality Health International. Thanks very much for your attention. And David, I'll hand back to you. Thank you very much.

Jonny, thank you very much. We're now moving straight actually into the next Q&A session for all viewers. We received a series of questions.

[Operator Instructions] The first question, I'm going to pass over to Shaun Matisonn. And there's a series of questions relating to Vitality Network. So I'll stick with those from Matthew Pouncett, Laurium Capital. The first question, Shaun, will personal pathways roll out lead to higher royalties or IP revenue for Vitality Network over time? And will the current revenue models need to recalibrate as a result of these.

David, I think the starting position is to the extent we won't charge specific royalties upfront. Initially, the purpose of the program will be to improve the underlying shared value proposition so to enhance the sales and the underlying performance and tap into our existing revenue models. Over time, as the platform gets more sophisticated and we have to bring in more local data, I think there will be opportunities to potentially charge more. But in the initial rollout, it will fit into our existing revenue model and current arrangements.

Thank you, Shaun. To the next question from Baron Nkomo from JPMorgan. Please can you explain how revenue is earned for your Vitality partners like Sumitomo and John Hancock and how the profit share arrangements work.

So as I said, our revenue is in 2 primary categories. The first is IP fees and service fees depending on what we do in terms of the implementation of the stack. And the second is what we would call [indiscernible] performance fees. And effectively, they've been determined to take a share of a value uplift. Now for practical purposes, the best and most simplest way to measure the value share is to look at new business sales from the shared value insurance platform, which is a function of premium or membership fees. So the predominant driver of revenue in both those partnerships is as a function of new business premiums, a percentage of new business premium, which really in a very simple way, captures the value uplift. Within both of those arrangements, John Hancock, there are additional bonuses that we earn in terms of higher level of engagement and with the Sumitomo, over time, in terms of improved persistency and improved mortality and morbidity. But those really are, I would say, the primary driver of revenue and what's driving our current 15% revenue target of the existing model where we're expecting revenue growth principally as a function of API growth and membership growth.

Great. The next question comes from Daniel from Ashburton. It relates to the data, who owns the data that Vitality generates in the partnerships with the partners and what is the average term of your contracts with the current partners.

So we would divide data into personal data and performance data. Obviously, we don't own personal data, but we share the ownership of the performance data. And that's really driving the growth of our global database and allowing us to create more and more enhanced personalization engines. So that's really creating a much broader and richer database almost on a daily basis. Many of our contracts extend well beyond 2030, and many of them have auto renewal terms as we continue to deliver the shared value solution.

Thank you. Shaun, staying with you. Can you please elaborate on the regulatory -- apologies, this comes from Neill Young from Coronation. Can you please elaborate a bit on the regulatory challenges you face in Europe? Why is this not an issue in other markets in which you operate?

So the specific challenge that I was referring to in Austria, where the regulator has restricted any changes in the underlying insurance product. So you're not allowed to vary premiums or make any changes in the shared value insurance concept. In many markets around the world, we found these initial objections from regulators, but working with regulators, they felt much more comfortable that we can vary the insurance product. India will be an example, which took many, many years of work together with the regulator to create changes in the insurance product, and those will continue to be enhanced. So those are the challenges in Austria, in particular, which means we've leveraged the Vitality program much more as an engagement engine to drive cross-sell. But we do start with often initial objections from regulators that we continue to work with share data, share experience from other markets, focusing on equity and fairness. And by and large, we generally see changes to the regulatory regime and to the products that can be approved.

Thank you, Shaun. I'm going to stick with you just for a little bit longer. Daniel from Ashburton. There's two more questions. One, I think you've largely dealt with, but we'll just affirm it for Daniel. Could you confirm that the revenue model is licensing fees and a variable component related to the share of uplift as a percentage of VNB or API uplift. And I think you have dealt with that. So that's confirmed, yes. And then the question around the distribution force, the 230,000 tied agents would be retained by our partners. That's a question mark, i.e., the distribution cost is not sitting in our cost base. So those are confirmed. Thank you very much. We might have some more that come in line. But Shaun, I think I'll move over to the Shanghai office, to David and to Candy. Candy, I think the first question I'm going to pose to you -- this question comes from Cornette. The question is, this is from Sanlam. The second half profits of 2023 and the first half profits of '24, when you look at the calendar year Ping An, seem particularly high. And the question is, what are the one-offs, if any, that are included here? And how do these normalize?

This is part of -- is from the tax-free investment. In the second half year of 2023, we do some investment in tax-free to get the tax benefit. But because this is the first time we do those kind of investments. So the amount is a bit higher than the previous half year. And for 2024, we do the normal treatment for the investment. So it is normally distributed through the months. So this will -- it can be seen as a onetime issue.

Thank you, Candy. I'll stick with you. Cornette had a follow-up question. What is the outlook for dividends from Ping An Health, given we had the maiden dividend in 2024 financial year, how does the parent feel about the payment of these dividends by the JV? So this would be how does Ping An Group feel -- apologies.

Okay. So thanks for the question because we do have a good performance on the profit. So that's why we distribute the dividend this year. And we will evaluate the dividend scale in the following years depending on our profit results and also depending on the capital requirement from our business. And our parent group is quite supportive on the dividend distribution and also they will respond for the dividend announcement from -- in publish.

Great. Thank you, Candy. David, in Shanghai, I'm going to move over to you. A question around the importance of Vitality in the Ping An business. This question comes from Michael Christelis from UBS. How important is Vitality in the business model in Ping An Health Insurance. What sort of penetration of Vitality is in the membership base? What happened to the rollout of Vitality to the Ping An Life customer base.

Michael, thank you for that question. I shouldn't say that question. You managed to wrap about 7 of them into one, so congratulations. So first of all, just to say that Vitality in the China market for Ping An Health insurance doesn't map back exactly to the way that we would experience it in the South African market, the U.K. market and some other markets. So here, we -- in Ping An Health Insurance, there are a range of health and wellness offerings, which include [indiscernible], which means fun health, which is a range of medical and wellness type of services that we make available to many of our customers, not necessarily bundled into the insurance product. The second is that similarly, we make wellness services, for example, in collaboration with Keep, the app Keep available to certain customers in an effort also to help them to keep healthy. And then we have a core proposition called [indiscernible] is Mandarin for Vitality. So Vitality so, and that's very much a lifestyle-oriented program, focusing primarily, but not exclusively on physical activity. So as you heard earlier from Candy, we have about 27 million customers now and approximately 7 million of them have access to [indiscernible]. But as I say, the offering and its role in the business doesn't map exactly to your experience elsewhere. So for example, we have all the different distribution channels that Candy spoke about earlier, selling different sorts of products to different kinds of consumers, so the penetration of these health and wellness services that I spoke about would be different amongst those different agency forces. But to give you an example, I mean, the new [indiscernible] product that we've just launched a couple of weeks ago that comes with [indiscernible] bundled . And so every agent selling that will effectively be selling that product has in it [indiscernible] bundled. In terms of the role in the business, I would say, it's very important and increasingly so. So as you heard, I mean, we're a health and wellness driven business. We're looking to specifically generate shared value. And so obviously, these health and wellness services that I described to you play an important role. And perhaps just to have this mental image in your mind, Michael. I mean, if you went back several years, half a dozen years, you would observe that Ping An Health Insurance was offering an excellent product, but it was essentially a financial protection, very good financial protection, with very good client service. I mean that has expanded to be sort of a triangle of offerings, which gives you the financial protection, but also gives you intelligent access to and navigation around the health care system when you need to access it by having a virtual primary care doctor capability offered through one of our sister partners, et cetera, et cetera. And then the third component is these programs such as [indiscernible], such as aspects of [indiscernible], which are giving you like -- in a Vitality spirit, they are giving you the knowledge, the tools and the incentives to understand and improve your health and to be rewarded for that. So I think very, very important. It is a journey. We're on a journey.

David, thank you very much. I'm going to stick with you. There was a question from Matthew from Laurium. The question is around the reinsurance arrangement, the thing on life. The question is why was this arrangement discontinued. Surely, this was a very valuable and large distribution channel.

Matthew. So the arrangement was not discontinued. It has taken different forms over the years and happy to discuss that if we have the opportunity to do so. But it continues. Reinsurance arrangements, not only with Ping An Life, which is our largest source of reinsurance, but also with other affiliates in the Ping An Group. So -- but if you look at the positioning over the last 4, almost 5 years of Ping An Health insurance, we have really focused on our own business, our own license business and the distribution channels and products that come along with that because obviously, we're able to dictate our own fortune and our own fate and we can recognize, as you've seen, respectable margins consistently out of that own business. However, having said that, reinsurance remains a significant opportunity, and we do take advantage of it. You may have seen in some of the bar charts that Candy showed on the results that there was an orange part, which is about our own business and then the gray part, which was about reinsurance. And in a nutshell, where we are taking advantage of reinsurance arrangements now are where a Ping An affiliate, including Ping An Life, is selling a health insurance product, a product that has features of health insurance in it, but where it requires our specialist capabilities, either in pricing or in claims management or otherwise. And that's an excellent place for us to offer reinsurance as part of a package deal and to add value to assist the company and to recognize some profit out of that.

I'm going to -- a question to you from Neill Young from Coronation. Could you elaborate a bit more on the ambition of growing 5% ahead of the market? The question is over what period? How fast do you expect the market to grow? And he's asking for somewhat of a split between growth in lives and pricing? And how do you expect the combined ratio to evolve? And how these costs expected to grow over this time? So I guess, reality of profits and of growth. Apologies, over to you.

Yes, No, Neill, excellent, again, collection of questions. Again, well done. So look, I think to start perhaps with the 5% ahead of market point, I mean, look, we can't peer into the indefinite future, as you can imagine. But certainly, as we peer into the next 3 to 5 years, we are, as you saw in one of my slides, people like BCG, people like China Macro Group and others are forecasting that the market will grow at a CAGR of, let's call it, 10%. And wherever that actually comes out in reality, we certainly are trying to, each year, set ourselves a target of beating that by 5%. And we've managed to do that over the last few years. And at least over the next few years, we'll continue to set ourselves that target for sure. How that breaks down in terms of -- I mean, it will be a combination of lives and price. I welcome my colleague, Candy's input here, and I'll hand over to her when I'm done on this because I'm sure she has some views. But look, it will be a combination. I'm not quite sure what that combination will be, but I mean, clearly, we will continue to grow our client base. But having said that, the product mix is kind of moving to higher value products. I mean, we have more mid-range products in the mix and also some higher end products, particularly in the group business, which has become quite important for us. So the average -- so price will also play a role. In terms of the COR, again, I'd invite Candy to comment on that just in a minute when I'm done with that. But obviously, as you've seen, the COR at the moment is kind of at the 90% level, as you saw from the figures. We -- as you've also seen in one of our slides, in the long run, not quite sure what the long run is to be clear, but in the long run, it will be challenging, I imagine, to maintain it at that level. But -- and so we would expect it ultimately to converge at a level that's somewhere, I would say, we are in the 5% to 10% in the 90% to 95% range. But that's a way off in our business. And why will that happen? I mean, because as we go on, I mean, we want to -- on the one hand, obviously, it's a competitive market. But I think most fundamentally, we do actually want to be providing more value and more utilization to customers, particularly as the product mix becomes more weighted towards more comprehensive products. And also from a competitiveness point of view, we clearly want to grow the top. You see part of our ambition is growing the top line, growing it ahead of the market and remaining competitive. So we have to strike that balance between what the margin is, the defensible margin over the long haul and growth in quality. And so that, I think, is sort of -- it's kind of the general picture. Hopefully, that's helpful to you. And again, it's something which we can discuss in some detail. But I think the bottom line is that when you look at the -- with the bottom line growth, the profit growth over time, we believe that as we're expressed, we're on a healthy and sustainable trajectory when you get to the actual growth in net profits. Candy, did you want to add to that?

Yes. Okay. I just add one point on the product because we provide more product to other -- we use it to provide to most of health people. So our profit margin is quite good for our [indiscernible] product. But now we also want to do some differentiation because the market is quite competitive. When people see the product is profitable, then everyone is coming in. So we are now doing some innovation. We will focus on the -- like [indiscernible] some older people then also like people with chronic disease conditions. And we hope that we can integrate our health care service with the insurance protection to differentiate the market, then we can have a higher price. And then we can earn profit from the insurance benefit and also from the service. So that's our target on our product innovation. And also, it's also a very good way to differentiate with other competitors. And for the COR, actually, I don't -- for all the international markets, the COR for health product is usually it'll be like 95%. So we hope that we can encourage our clients to use more service, and then we can increase our loss ratio to a certain level, but we will also to make our AI tools, the risk control tools, to cut down our expense to make the operation more efficient so that we will still achieve a certain level of the COR to get our profit target.

Thank you very much. I'm going to shift over to the U.K. office, to Jonny Broomberg. There's a few questions across the business. I'll start off with the first question. The question comes from Michael Christelis from UBS. What is Amplify's financial model, i.e., how does it generate revenue and how fixed are the costs?

Thanks, David. Thanks, Michael. The revenue model is to generate revenue from the AIA markets where its solutions are deployed or from external clients, of course. There are different methods of charging, Michael. Some of these are just on a time and materials basis, but significantly and importantly, most of the effort now is shifting towards a subscription model where a client would subscribe for a certain package of the underlying products, payer base subscription fee, and then there's a very important value share component that will be paid based on the value created by the Amplify Health products in the insurance books of the clients. So I hope that answers the first part. In terms of how fixed the costs are, this is very typically a health tech type of business, Michael. So the costs are relatively fixed, there's needed to be an investment upfront to build the team and build out the technology. Once that is built and the company is really a long way along there, as revenues scale, margins will grow because the costs are relatively fixed, and it would be a small amount of variable cost that gets added as the revenues scale.

Jonny, thank you very much. We'll stick with you moving over to the U.S., a follow-up from Michael. How different is your Vitality U.S.A. health care offering to what you did with Humana in the past? Why did the Humana partnership not work?

Thanks, again, Michael. So I think it is similar only in the sense that it's a partnership between our program and a health plan or a health insurer. It differs in a multitude of ways, Michael. Firstly, it's available to the entire market and not an exclusive arrangement with one insurer, in that case Humana. What we've seen in the market, I mentioned during my presentation, was rapid consolidation of providers of services like we provide. What has happened since the Humana relationship, Michael, is that the very large insurers, of which Humana is one, United Healthcare would be a second, Cigna, they have internalized all of those services and products, and they deliver them themselves to their own insurance clients. And so what you have now is a very large market outside the very big insurers of smaller regional insurers or national, but typically smaller often, for example, the Blue Cross Blue Shield plans. There's a growing class of plans that are provided by health systems, in other words, large hospital systems. And all of them are not big enough to build their own products like this, and they're looking to external vendors. So that's the market that we're addressing. It's also very different, Michael, in that the product is massively enhanced since the days of the Humana JV in all the ways that you've seen discussed by Adrian and Emile and in my brief presentation. As to why the Humana JV didn't work, to be simple and clear, Humana wanted to take those services in-house, and they have the right to do that under the agreement that we had with them, and there was a very kind of regulated parting of ways, and they were entitled to continue with the Vitality IP and even the branding for a period of time. And that has now become entirely an internal Humana capability. I'll hand back to you, David. Thank you.

Great. Thank you, Jonny. We're going to try -- just jump through a few questions a little bit to try to get through a few more if we can speed through these. Jonny, with you from Matthew, Laurium. In the U.S., the Personal Pathways products sold to medical health plans or they directly sold to clients. How does this product rollout impact the relationship with John Hancock, if at all? And is John Hancock not entitled to this product through the VN relationship.

Thank you, Matthew. No, it's -- we are definitely not a B2C business in the U.S. We are clearly a B2B business. So our products will continue to be sold to employers. And then, as I've said, increasingly, we'll focus on health plans, but it's distinctly B2B. And then very clearly, John Hancock through the partnership with us that Shaun mentioned in his presentation on VN, john Hancock will benefit from all of these product upgrades and enhancements to the extent that John Hancock requires them. Bear in mind, some of the enhancements I mentioned are really quite germane only to health insurance and a life insurer would not need, for example, things like benefit and care navigation. But it may well benefit from the personal health pathways and all of the upgrades on personalization as well as from coaching, for example. So our team in the U.S. will work with John Hancock and make available to them all of these upgrades when they're available and deploy according to their needs.

Thank you, Jonny. I'm going to stick one more with you. This is from Leonard from M&G Investments. Has Amplify Health been successful to date, attracting insurers outside of AIA? What are the prospects of this in the next few years?

Leonard, what I'll start off by saying is that a huge proportion of the effort, well over 90%, 95%, in this early phase has been focused on building and then deploying the AIA solutions to AIA. So there have been some efforts to build a market outside AIA, but they've been limited thus far, they are ramping up now. There are some early contracts, relatively small pilot projects and early contracts outside. Amplify Health made an important acquisition about 18 months ago of a business called AiDA Technologies. This is the leading Asian builder of claims, AI systems, that are able to interrogate claims coming in and identify fraud that can then be rooted for manual or automated intervention. And through that acquisition, there are a number of existing non-AIA clients, predominantly in Singapore, but also in other markets that are currently AIA clients as well. We're very optimistic about the opportunities for growing outside AIA over the next few years.

Thank you, Jonny. I'm going to combine two questions to Shaun Matisonn here back in South Africa. Question from Justin Floor from PSG. Is Discovery [indiscernible] enough value from its partners from what we provide in terms of Vitality? What's the scope to improve the monetization. But I think it links strongly to a question from James Shuck from Citigroup. The gross revenues of around ZAR 1.9 billion in 2024 for the business, why so small given how long you've been partnering and with how many. Why can we not do bigger? The market size suggests a very low take up. How are the revenues derived? I think we've answered the final question, maybe to the first.

Great. James and Justin. I think the principal point is you're right, that's why we do -- in terms of the absolute size of the revenue, that's why we feel confident in terms of the growth going forward, given the foundation that we've built over the last number of years. And as you say, the opportunity to expand. So I think we would answer that question slightly differently in that this really sets us up, the work we've done so far. Some of the years were covered by the pandemic where sales were somewhat muted. We do feel that we're well positioned to capture the growth opportunities and I think our partners would share that. On the question, are we capturing enough value? I think this is always a difficult question. I think these are -- to one of the earlier questions, these are about building long-term sustainable partnerships. And in order to do that, both parties have to feel comfortable with the value share. And I would argue today, I think, by and large, both parties do feel comfortable that the value share represents the contribution that both parties bring to the table. And that really is the cornerstone of creating long-term successful partnerships.

Thank you, Shaun. James had somewhat follow-on question from that to the end. The expense base of $73 million doesn't seem a particularly large spend. Why would you not scale it more quickly? Would you consider third-party capital?

So thank you for that question. I mean, we do feel that the expense is more than sufficient to roll out the product suite and the support of the various marketplaces. Obviously, if there's opportunities to increase new product lines, we would take advantage of that or make particular investments over time. But given the runway ahead of us, we do believe that the expense base is more than sufficient given the historic investments that we've made into the platform. And as a consequence, we do believe that we can grow the revenue and increase the operating margin to 50% under the current economic model.

Great. Thank you, Shaun. I think we are out of time. I'm going to try to squeeze one more question in. And I guess, the China team has stayed up late. So I'll give them the benefit of the final question to Candy. The question that was posed, you showed market share increasing for product types that you offer. Which product types are not currently offered? And what are the prospects of doing so in the future?

Okay. Yes, we do a lot of efforts on the medical reimbursement insurance product in the previous years, and it do need a lot of expertise and speciality. And now the market -- because the Chinese market is still young, so in the past, the health insurance market is just focused on medical insurance product and [indiscernible] disease product. But in the future, we do believe that long-term care business is a new promising market. So we will try to explore the opportunity on long-term care business. Also, we are doing some disability income business. But we still have a pilot because the customer will be more delicate on their needs and also the insurance product -- the provider of the insurance product should definitely meet the detailed needs from the customer. So we hope -- we will explore the long-term care product and the disability income product to meet those kind of needs, but we are not quite sure if those kind of products will go very fast speed because it's still on the pilot status.

Candy, thank you very much. Unfortunately, that is actually all we have time for. We probably crept over. And I want to make sure we get sufficient time for our U.K. team.

We will now be shifting back to our U.K. offices, where we'll be joined by Neville, the Vitality CEO, who will be taking us through the U.K. business and Vitality Health, followed on by Justin Taurog, the MD of Vitality Life in the U.K. Neville, over to you in the U.K.

Thank you, David. Really if I'm looking at the U.K. business comprising Vitality Health and Vitality Life, underpinned by a very, very strong Vitality chassis, we can see that we've built a business of significant value and scale over a period of time. We now cover over 1.9 million lives in the U.K. between Vitality Health and Vitality Life. This last year, we wrote over GBP 200 million of new business premium income. And from a financial perspective, just to also say that we were rated by Fitch as an A rating, which certainly has given us the significant stature as a strong financial insurance business in the U.K. If we look just simply at the embedded value of nearly GBP 1.2 billion, that translates into us being firmly in the FTSE 250 when we compare the embedded value to the market capitalization of the FTSE 250. So very significant growth over the last period ensuring that we are in a well-positioned place in the market. And our ambition is very, very clear. We want to be the U.K.'s leading next generation insurer and very much pioneering a new category of insurance. As you know, we term it shared value insurance. A lot of it is around the positive behavior change that we unlock making members healthier through our hyper personalization. And that gives us the ability to actually create and put into the market much more competitive products, which have got superior financial benefits as well as a powerful force for good for society. The value chain is something that I will deal with a little bit later, but very importantly, the coalescing of behavioral, actuarial and data science, with our technology, creates a significant competitive advantage for us. Also importantly, the U.K. is run as a fully integrated composite business, offering brilliant customer journeys that drive significant member engagement. So if we look at the assets underpinning this that we talk about in terms of giving us this sustainable competitive advantage, I think very, very importantly, the chassis on which Vitality Health and Vitality Life have been built on with the underlying Vitality program has allowed us to actually truly integrate Vitality into the underlying insurance products. And this manifests itself in our Vitality Life Optimizer product, in our Vitality Health pricing, ability to actually use the Vitality program to give us a competitive advantage in those particular segments of the market. Our brand is very strong. I'll elaborate a little bit on that just now, but significant investment in our people, our distribution and our data and data science capabilities. Just spending a little time on the brand. We have, we believe, created a very aspirational brand in a very low-interest category. And over the years, what we have seen is a significant growth in the brand awareness through the utilization of our mascot, through our ability to actually cut through what is, as I said, a low-interest category. And we are really, really proud of the fact that from a brand awareness perspective, today, the Vitality brand is very much, in terms of brand awareness, at the same levels of the average of our big competitors. And bear in mind that you're talking about massive organizations that have been around for over 100 years in the United Kingdom. The Vitality brand as a stand-alone brand is only going into its 10th year. This has been endorsed by award-winning brand campaigns and also some unique brand collaborations. Our latest one being with a high street chain, that is very, very significant in the U.K. called itsu, where we've been doing dual branding. And certainly, from our perspective, we've seen a significant uplift in the brand awareness. The one thing I do think where we have a significant competitive advantage is our diversification of distribution, whether that be on the health side or the life side. And we've worked hard over the years to make sure that we have a very diverse distribution strategy. And you can see in the health side, a significant amount of our business is now actually brought in via the direct channels in terms of the personal health insurance, in terms of business telesales as well as our franchise channel. So there's a significant ability for us to actually be diversified in that respect. In terms of Vitality Life, also, over the years, we have seen a good diversification away from just a dependence on the intermediated broker marketplaces. The Vitality Health adviser base is being consolidated over a period of time, and we've been pretty stable in our support there. What is very, very encouraging though is over the last 12 months, we have seen a significant increase in the adviser footprint growth in the life business. And that bodes well, and it's starting to manifest in significant volumes coming in, in our Life business. Emile has spoken a lot about our comprehensive data set and advanced data science capabilities as an organization. Just to reiterate that the architecture for personal health pathways is being utilized in the U.K. in a significant manner, in terms of the dynamic risk assessment, in terms of the ability for us to recommend those next best actions for our members, and what we're seeing is the output of this is significantly increased engagement and benefit utilization amongst the base, both on Vitality Health and on Vitality Life. But in the context of the U.K. market, it is evolving, and we've got very different dynamics that are driving each one of the businesses. However, we see significant opportunities going forward. Let me start on the health side. We've seen the PMI market grow significantly over the last 2 years. And this is very much a function of the challenges that the National Health Service is facing. On the Life side, we are also seeing a dramatic shift in the way that the market has moved. There's been a period of very flat growth in the market, and this is very much a function of the high interest rates, high mortgage rates which is a proxy for the life insurance marketplace. But it is still a massive, massive market, the fourth largest market globally. Very importantly, we've also seen the exit of several competitors, which does open the door for us to grow amongst the remaining competitors. But importantly, and Justin Taurog will take you through, how the market has changed and how it has commoditized itself with our advisers, with the advisers actually relying significantly on adviser portals to give advice to their clients. And this is a very important dynamic that has changed the market and has allowed us, through our product range, to be able to capitalize on this and ensure that we can actually have significant growth opportunities. Before I go into Vitality Health and Justin goes into Vitality Life, I did want to make a point that from a financing perspective, we are in a very, very strong position. Over the last 2 years, the scale of the U.K. business has meant that Discovery support, whether it's through debt or equity, has no longer been required. The businesses are self-funding. Vitality funds its new business from its in-force book as well as financial reinsurance. Vitality Health is cash generative and all new business is funded from the cash generated there and the in-force cash flows. Over and above this, we actually returned GBP 20 million to the center, to Discovery to cover the finance costs paid by Discovery or the investments in the U.K. So we're in a very, very strong and powerful position from a cash perspective. We are also forecasting that we'll be generating surplus cash over and above this from 2027 onwards. So let me move on now to Vitality Health. Against the backdrop, as we've said, around the challenges in the NHS, the output of this is that there's definitely been an increased utilization of private medical insurance, which has placed pressure on the PMI providers in the marketplace. There's been a review in terms of the National Health Service. Nothing new came out of that review. It just really reinforced the issues in the NHS and the fact that it is going to take, we believe, a significant amount of time to get the NHS back to the levels that it was many, many years ago. The consequence of this is, obviously, the demand that is being driven by these NHS backlogs has actually manifested in a significant increase in our authorization for our members. But we believe that we are probably better positioned to capitalize on this than our traditional competitors. In the traditional value chain, it's simply underwriting, you get your premiums in and then you pay your claims and then you manage the exits. From our perspective, our Vitality Health value chain is significantly more sophisticated and gives us significantly more competitive advantage. The first point of call is the acquisition pricing and underwriting is much more sophisticated. We're using underwriting and pricing techniques that can give us significant competitive advantage and profitability. And a lot of that is driven by the data science and by price optimization techniques. But very importantly, the behavioral risk management and shared value allows us to actually personalize our health risk management and allows us to drive increased engagement. And as we know, the more engagement we have, the better it is for the claims fund. But however, when we do get into the claims, we've created significant assets around value-based care and the value-based contracting and risk sharing with providers and our networks that we have developed have given us a significant competitive advantage in terms of our care delivery. And then our claims and our retention efforts are very, very sophisticated in terms of managing our claims, managing the ability to actually retain clients very much around the basis that they're getting much more value from Vitality than they would get from a competitor who doesn't have the value add of our Vitality program. How has this manifested then in this shift in the marketplace. There are 2 very, very important things that we really need to understand that there is a new water level of claiming in the U.K. Every single one of the PMI providers, the health insurers in the U.K. have been faced with significantly increased claims. And the result is that we've all had to initiate significant renewal increases and new business pricing. And I guess the real test is how has that had an impact on the retention. And I'm pleased to say that from our perspective and very much around the Vitality value proposition, we have seen our retention being exceptionally robust. So whilst we've had significant premium increases like the rest of the marketplace, we have managed to actually retain members on the VitalityHealth plans at a very, very significant rate. We may have explained to you in the previous analyst sessions in the results that the real challenge now is when you get this new level of claiming is how quickly can you catch up on these premium increases. And there's always this lag effect because you get hit on the claims on the day and you've got to account for those immediately, but it takes time to manifest the premium increases to manifest to a way where they can actually catch up to the claims. And I'm pleased to say that we have made excellent progress in this regard. As the diagram shows, there is that time lag, but we have been implementing these increases rigorously over a significant period now. And the combined impact of this is starting to actually manifest in us getting to this new level of premiums that is sufficient to actually bring ourselves back to our margins that we were operating in previously. So going back to some of the capabilities, and I think very importantly, our sophisticated pricing capabilities around these premium increases and the data to optimize our competitiveness and profitability has stood us in exceptional stead in the ability for us to actually rebalance the premiums in our book to make sure that we have got sustainable premiums to deal with this new level of claims in the marketplace. Also very importantly, the Vitality program has driven a significant differentiation for us. And the daily engagement that our members go through actually unlocks huge value for them in the form of improved engagement. It allows for us to actually have improved claims and lapse experience, 2 very significant components of the value drivers of our business. But it also makes it critical that our engagement experience is market-leading. We have spent a significant amount of time and effort and investment in making sure that our member app and the customer journey in the Vitality program has been creating an experience that gives our members significant value. And what I thought I would do today is just give you a very quick demonstration of the member app and how our members can engage with it. [Presentation]

Hopefully, that gives you a flavor of the experiences that our members enjoy. I think I just do want to just bring to light the fantastic results around engagement in terms of the value that we've given back to members over and above the claims that we've paid, getting close to GBP 100 million worth of value that we return to members through the Vitality program, a significant amount. And this really manifests in them having a tangible benefit of being part of the Vitality program, and we believe is a key, key driver from a retention perspective. I want to move on now to the VitalityHealth's market-leading health care assets, which are driving superior outcomes for our members and are helping manage those downward costs. We've introduced our Everyday Care, which essentially is a benefit package that includes physiotherapy, talking therapies, GP consultations. And this has been incredibly successful in actually helping us reduce more severe claims over a period of time. This, combined with our user-friendly digital pathways, make it very easy for VitalityHealth members to navigate their health care systems themselves and also allows us to drive our members to more cost-efficient health pathways. So it's a win-win for everybody. It's a win-win for our members. They get a frictionless experience in the health care system. But we, as an organization, also get the benefits of the care pathways, which are giving a lot more efficiency to us. All of this is powered by our AI and our ability for us to actually channel to the relevant providers. Our Care Hub has been a significant asset that we have been working on that allows people to do everything from claiming to actually getting primary care benefits. And I thought it would be more appropriate for me to actually hand over to Dr. Katie Tryon, who will give you a firsthand demonstration of our Care Hub and how we have transformed the claims experience as well as the members' ability to interface with the health care system. So I'm going to show you a video that Katie is going to go through all of this.

Thanks, Neville. I'm proud to share with our audience some of the exciting digital assets we've developed to enhance our members' health care experience, delivering a seamless and fully digital journey all the way from seeing a GP to booking with a specialist. Traditionally, the pathway into private health care in the U.K. was fragmented and complicated to navigate. Not only did customers often need to wait to see NHS GPs in order to get referrals for their onward private treatment, but the process of making a claim and booking with doctors was overwhelmingly telephone-based. Vitality led the market in the introduction of Everyday Care as a feature of health insurance through our virtual Vitality GP service in 2015. This tackled the first challenge of people needing to go public before they could go private, making the process much more seamless. We now deliver over 20,000 GP appointments a month, demonstrating its positive impact. Since then, we've expanded on this and built an entirely digital pathway into care in the form of the VitalityHealth Care Hub, a platform where members can access everything from GP appointments, Everyday Care treatment like physiotherapy and talking therapy and book specialist consultations and treatment. More than half of our claims now start online, delivering a better self-service experience for our members, reducing call wait times for those who do not want to interact by phone and reducing operational costs. Let's take a closer look at how it works. [Presentation]

So moving on, I believe that we have a very, very clear growth strategy driven by strong distribution. But very importantly, if you actually look at how the U.K. PMI market is segmented, there's a significant amount of the market that is corporate. This is driven significantly by those large corporates and the profitability in those sectors is not as good as the SME and the individual sectors. And we've taken a conscious decision to focus much more on the more profitable sectors of SME and individual. And as a result, you'll see that we actually over-index on SME with a 24% market share as well as in terms of our individuals where we've over-indexed with a 26% market share. And the consequence of that is that we believe that we are in a very, very strong position to drive margin as well as volume. So we are on track over this next period of time to get ourselves back to an operating margin of about 7.5%. We believe it is achievable with a strong evidence to support our ability to deliver this through lower benefit ratios. We know that we are operating at a significantly lower benefit ratio than our competitors. Our retention rates are extremely, extremely good. And our digital capabilities that hopefully you saw in that Care Hub demonstration are also driving significant operational efficiencies. And we've seen a significant drop in our servicing costs per life over the period of time, and digitization is playing a crucial role in that. So let me summarize in terms of the investment case for VitalityHealth. We know the demand for PMI is growing, driven by the challenges in the NHS, the heightened awareness of health and well-being and the increased focus on employer health. So everything is indicating that the market is still buoyant and the market has still got significant growth potential. We've successfully rebased our pricing and retention has remained strong as well as making sure that we are offering value-added benefits to our members through a brilliant product suite. We have a unique operating model, which is supported by market-leading capabilities that I've spoken about. And we've got a very clear growth strategy and strong distribution channels to achieve that in the more profitable segments of the marketplace. And we are very, very confident that we will be able to get back to our 7.5% operating model -- margin rather in the short term. And we are feeling very, very comfortable that we will be able to deliver this. I now want to hand over to Justin Taurog, the Managing Director of VitalityLife, who will take us through the next phase.

Thank you, Neville. And maybe before we switch back to the U.K. team to Justin, I think, maybe just to help the audience, we've really tried to see -- we've challenged ourselves to see how do we tangibleize some of the incredible work that the team in the U.K. has done in terms of digital innovation and bring customer solutions to customers in a way that's in the app in the most digital savvy ways and hence, kind of the use of video to try to represent that. We welcome suggestions about the best ways for us to bring that message to you going forward. Before we move on to the final session to Justin, maybe just to remind the audience, if you do have any questions, please you can post them on to the platform as we speak. After this session, we will move into the final Q&A. But for now, I hand back to the U.K. team to Justin.

Thank you, David. As you've heard from Neville and the team, the U.K. life insurance market is a significant market by scale, the fourth largest life insurance market in the globe. Unlike PMI, unlike health insurance, the life insurance market is a long-term contract where the term of a policy is typically 20, 30 years or potentially even whole of life. The traditional value chain in insurance relies on underwriting once upfront at point of sale and then the insurer having a relationship whereby they collect premiums from the customer over the term of the policy and there's an exit either through a claim or a lapse or the maturity of the term. And there's very little ongoing relationship and incentive to change behavior over that term and reward behavior change over that term. Our shared value insurance model provides a fundamentally different approach to life insurance, as you've heard from the team, both through the way we're able to apply acquisition, pricing and underwriting tools using data science, using the Vitality shared value insurance model to optimize the competitiveness and the profitability of our products, and I'll touch on that through the presentation. Also, the behavioral risk management and shared value methodology are driving engagement, and that's been a significant focus of ours to increase engagement in the book. We optimize outcomes both for the policyholder and for Vitality. And then the dynamic premiums that we then apply, and I'll give you a bit more visibility on that in the presentation, we believe creates a much fairer equitable structure over the term of the contract and provides financial incentives and rewards for customers who look after the health and take steps to improve their outcomes. That then all manifests in positive selection on lapses as we tend to retain more healthier lives in a traditional model and also obviously improved mortality experience, as you've heard throughout the day. Now the U.K. protection market, as Neville touched on, it's still predominantly distributed through financial advisers, unlike maybe car and home where obviously, a lot of that is written direct. But advisers do use portals, which are, in effect, aggregated tools for advisers to source the majority of their protection advice needs to their consumers. The portals in effect, operate very similar to an aggregator site in that the advisers will enter details and will then get a ranked listing of providers and price there is the key mechanism of ranking the providers. What the portals have done and the design has been doing is encouraging the adviser and the customer to move just beyond life-only term cover and through the use of multi-benefit, providing more holistic financial solutions, including life insurance, serious illness cover, income protection, as you can see just through that screen shot. But what we've also learned is that the performance on our term life pricing is key to encourage consideration for the richer multi-benefit package. As you can see on the top right there, the portals and the distribution models and providers have driven the market to increasingly write more benefit as multi-benefit. And this is optimal for the consumer, as I touched on more holistic protection and also better for us in terms of a richer product set. And you can see how the industry has moved significantly up where, in effect, 50% of business now is written as multi-benefit. On the bottom right, you can see serious loss cover and income protection now account for almost 50% of market sales. So it's been beneficial, as I say, both for the consumer and for the providers. Now the uniqueness of our Vitality Optimizer product set enables us to compete in a different vector on the portals to a traditional life insurance product. It enhances our competitiveness on the portals and delivers greater value to members and to VitalityLife. And as you can see there on the screen, I've given you a screen shot over a typical portal outcome. And without the Vitality Optimizer, our products are in the market, but they certainly tend not to be the cheapest in the market. We're not competing on price as that key methodology on our traditional life insurance products. On our Optimizer product where we give everybody upfront -- an upfront discount in effect the platinum rate through a discount starting premium on their life insurance. The optimizer pushes us up the portals and enables us more often than not to be top ranked on the portals, providing that upfront competitive entry point. What the Optimizer also drives our shared value integrated product is customers and advisers actually use that discount rather than to pay a lower premium, they use that discount to actually buy their cover. And you can see our average benefit size is 31% higher on our optimized product than non-optimized. And also, the adviser of the customer tend to take more benefits on serious illness cover, income protection, waivers, et cetera. So optimized products tend to have 79% additional cover selected than our non-optimized products. So better protected, more efficient, we believe, in our insurance proposition. And as you can see, we write substantively more multi-benefit business than the market off the back of this optimizer methodology. What the optimizer also obviously does then is -- and you heard some of this in Emile's presentation, generate superior value for Vitality. So if you start with our non-optimized base in the gray bar there at 100, the fact we're able to improve mortality through physical activity and other health interventions improves the value of a nonoptimized product there, as you can see, by 20 units. The fact we also retain more of the healthier lives provides further upside to Vitality. And then you have the premium mechanism, upfront discount and the increases to the premiums obviously then in effect netting themselves off. And then the final element in the green bar that also drives significant additional value to Vitality on our optimized products is this fact and this analogy I've shown in the middle there that our customers tend to buy more benefits on the optimized product. So we end up with 159 in effect, the value of an optimized policy compared to 100 for a non-optimized product. So shared value insurance really transforming the outcome for the consumer and for Vitality. Now given the importance of portals and maybe just to give you some context of the portals, we generate on average 1 million quotes a month on the main industry portals. And that will be advisers going on to a portal with a customer to source protection across the market. But rather than talking you through it, what I actually thought we would do is just show you a short video on how the portals operate in practice. [Presentation]

So as you can see from that, what the optimizer and shared value has enabled us to do is compete on a far more efficient pricing mechanism and not just competing on the price of a traditional life insurance product. And maybe just to give you some insights on some of the key metrics. On the portals, taking term life as an example, our non-optimized product would be in first place, maybe around 11% of cases, whereas with the optimizer and that upfront discount, our Vitality optimized product tends to be in first place around 80% of quotes done on the portals. So a far more effective way of delivering new generation life insurance in this commoditized market. Now the portals in effect, don't give you much space to show much of the other product features, and that is an area we spend a significant amount of time on. So I'm just going to show you another video just highlighting some of those tools. [Presentation]

So as hopefully, you can see from those 2 videos, our shared value dynamics have enabled us to compete in a commoditized market for a differentiated product and unlock superior returns off the back of that. So our optimized upfront discount in combination with advanced price optimization, and I'll talk you through what we've been doing there around price optimization, enables us to compete on the portals with a differentiated product whilst balancing volume and value. Then the dynamic premium increases in combination with the Vitality program, provide health engagement and greater value to members and tangible value to our members through partnerships with some of the world and the U.K.'s leading reward partners and health partners. And the pricing, as you can see there on Platinum, if somebody stays platinum, they'll maintain an upfront discount for the duration of their policy and then a fair mechanism and an incentive to the broader membership to engage. Engagement, as Neville touched, has been a significant focus of ours to drive more engagement across the book. We're seeing some very pleasing early signs of getting nonengaged members engaging, and that is a continued focus through personalization, as you've heard from Emile and Neville. And what that ultimately then translates to is better mortality, morbidity and lapse experience downstream as claims can have substantially better outcomes through physical activity and engagement. I think what's also crucial is now we're seeing increasing engagement in our 50-year-old and 60-year-old book. It's not that's across the book, we're seeing engagement in Vitality. And it's unlike compound interest that you need to start saving for a time in your 20s and your 30s, just making a step to make more frequent physical activity, as you heard from Emile, even in old ages can make a substantial difference to the customers' life and also to our claims experience. And you can see the results are quite stark in terms of the improvements to mortality and morbidity. We have integrated share value into our valuation model, and we've had some very promising discussions with our reinsurers just showing and working with them to surface the value of physical activity as a key lever to improve mortality over time. We also at LSE worked through the research and endorsed the global research we have underpinning that importance and power of physical activity. A key focus of our team over this year, and you would have seen some of these results in the annual results announced recently is where we've become far more sophisticated is using the optimizer and the shared value insurance model with sophisticated price optimization methodologies, allowing us to optimize for volume and value and maximizing that portal opportunity. So we made significant improvements to the sophistication and the speed of our price optimization. We have, I believe, some market world-leading data models to understand what is that optimal pricing point, optimizing value, optimizing conversion, understanding elasticity to drive that increase in volume and profitable increase in volume. As you can see on the right there, we started this more sophisticated price optimization in February. And it really was a result of a tale of 2 halves for the financial year. Now as you can see, the market dynamic, as Neville, obviously, mentioned, is that we're in a market that has been flat, inflationary pressures, mortgage pressures and the market was flat over this period. But VitalityLife had an 18% increase in new business from H1 to H2 of the financial year. What that translated to, as you can see on the bottom, is the new business increased, and that generated a substantive increase in IFRS 17 new business net value, the margins, CSM and risk adjustment we created in the second half of the year. And as you can see, in H1, in effect, we just covered our expenses, didn't add any further IFRS 17 net value -- any further IFRS 17 margins. In H2, we added over GBP 16 million worth of new business net value, a substantive improvement. And that, as you can see, also started to manifest in the VNB. So whilst H1, we had some market pressures and other inflationary pressures with the inflationary environment at the time, in a difficult market, we've actually, I believe, delivered exceptional new business results off the back of that intersect of price optimization and our shared value model. Our new business value generation, looking at it from an IFRS 17 perspective, is the key measure we're focusing on from a new business optimization perspective going forward. We're at a point where we are getting sufficient scale in the business, as you can see from the prior slide, the new business volume above the fixed expenses is growing. Key is to keep growing those jaws to keep growing that new business growth with fixed expenses growing by a lesser amount. As you can see, the tools we have is obviously volume being one element, how do we drive through price optimization volume. But the key factor is driving profitable volume alongside that. And as you can see, the optimizer, the margin -- marginal profitability of Optimizer is higher than non-optimized, substantially higher and also multi-benefit, the more we can get serious illness cover and income protection, serious illness cover has almost 3x as profitable as term only and income protection 4x. So being able to use price optimization, the term price, how we maximize this multi-benefit has been key to driving that increase in marginal net value. And at the same time, having invested and continue to invest in automation, digitization, data and utilizing AI to get more efficiencies in our fixed expense base has been key. An example there, as you can see, is our underwriting STP rate. So how many decisions we give at the point of application is now almost 80% and it was around 71% if you were to go back a year ago. So giving much more decisions at that point of sale, whether it's to accept, load or exclude the policy, give that clarity to the advisers and the customer. And we're investing in our underwriting systems, our claims systems, our Vitality systems, as I say, using digitization and AI and seeing that benefit manifesting now where the scale is now starting to drive an increase in volume without that similar increase in fixed expenses. Just to give you some insights into quarter 1 of this financial year. CSM and risk adjustment growth is the key engine for future earnings growth in IFRS 17. I've just put a little waterfall together there to give you an illustration. If you take the opening margins for the Vitality business at the beginning of the year, obviously, will get interest accreting on those margins because that's based on the interest rate when the policies were originally written and obviously, we have been in a historic low interest rate environment, that interest accretes at about 2.5% of the margin. You can see the GBP 10 million. At the same time, the earnings and the CSM risk adjustment are releasing to earnings, obviously, at a bigger quantum than the interest accretion. And the key is clearly to get new business to fill that bucket and to grow CSM and risk adjustment. And as you can see from this, we need circa GBP 27 million net value to be created on new business to maintain our margins in the business. Now H2 trajectory has continued into the first quarter of 2025. The first quarter is typically the summer in the U.K., July, August, September, typically slightly quieter months from a seasonality perspective. But you can see even in that environment, we delivered, I believe, fantastic new business results. Just comparing quarter 1 of the last financial year to quarter 1 of this financial year, new business APE is up almost 30%. At the same time, new business policies are up by 28%. So we're not just growing smaller policies, we're keeping that business mix. And in fact, our business mix is looking very strong. And what that means if you were to compare those same quarters, we've generated GBP 8 million margins. I just would qualify these aren't audited numbers, obviously, we would have delivered GBP 8 million worth of CSM and risk adjustment compared to, in effect, a slight negative number in the same quarter last year. So an incredible result of that price optimization and shared value model. I would also note that obviously, we continue to see the market moving and price is changing. So obviously, this is something that we will and do continue to monitor, but certainly a promising early start to the financial year. And then just the final slide from me. VitalityLife is still a relatively young insurer, as Neville spoke about. We got the VitalityLife license, our own life license in 2016 and a quite significant investment in that early phase to build scale. Obviously, we never had an in-force book at that point in time. So we required a fair amount of capital from Discovery to fund new business. From June 2021, we became self-financing in the U.K. And as the in-force book grows, we will see that continue to drive an increase in cash flow. Obviously, as you can see from the bottom left there, the life insurance business and cash flow signature reflects that of a long-term insurance product where you have obviously commission and initial expenses upfront. We use FinRe in effect to help fund a key proportion of those initial expenses. And then over the early duration of the policy, you are getting positive cash flows, but having to also repay the FinRe. And once you repay that FinRe, you then get the positive cash flows continuing to build. And clearly, now we're getting to a stage where we're getting years of in-force cash flow starting to build an increasing cash signature. So as you can see there, this is just VitalityLife. We're not requiring any further capital from Discovery, funding the new business both through the in-force and financial reinsurance. And from 2028, the operating cash flows, ignoring FinRe received and repaid starts to turn positive. And as the business grows, that will -- that should keep continuing to build. So just to summarize from me on the investment case for VitalityLife. So firstly, the market is large, GBP 65 billion. We have been through a tough environment, inflation, high interest rates, suppressed mortgage market, but the economic outlook is stabilizing, which should be positive for the industry as a whole. Neville also mentioned the exit of several competitors, and that does create opportunities for growth from the incumbents in the market. Secondly, whilst the market is increasingly commoditized, and I know you've seen the importance and the usage of portals, our optimizer shared value product provides us a unique differentiated ability to provide a customer-driven product competing with sophisticated pricing optimization, driving growth in profitable segments. So I think that's quite -- to us quite key that shared value product together with price optimization, the power of that. The share value dynamics also put us in a strong position as it drives favorable mortality, morbidity and retention experience over time. And particularly as we build more personalization, that is an area that will keep and continue to be a significant opportunity. Then through the ability to drive profitable business through our product composition and price optimization and manage expenses as we increase and get that scale balance right, we are, we believe, well positioned to drive new business value generation going forward, and that being the key measure for growing CSM and risk adjustment. And then finally, not requiring any further shareholder from Discovery, even though we are still a young insurer, VitalityLife is now financially independent and will start producing surplus cash from 2028. That was it for me. Thank you.

Justin, Neville, thank you very much. We are now moving to the final Q&A session. We actually will be joined -- Justin, Neville will remain online. We'll be joined also by Justin Skinner out of the U.K. as well as Keith Klintworth the group -- the VitalityHealth CEO as well as Emile and Deon will join us online as well. And I'm going to start off with the questions. Again, any questions, please send them through, and we will work our way through them as we go. The first question comes from Warwick from RMB Morgan Stanley. This question, I will direct to Keith for you. The question is, how has VitalityHealth's market share changed over time? And do you have a sense of a potential market share without sacrificing profitability?

Warwick, thanks for the question. Market share has always been quite difficult to calculate in the PMI market in real time, largely because of the lag in data, but also whether you're looking at premium, whether you look in including trust business or whether you're looking at lives. The ABI data just recently came out this week for 2023. And it's been interesting to see that the market grew from 2022 into '23 by about 7.3%. VitalityHealth during that time grew by 11%. In the prior year, we grew by 14% with the market growing at 7.7%. So as a percentage of market share by total lives, we are now at about 15.38% market share. When you look at premium, if you exclude trust, we actually are also holding our own and believe we are in about third position overtaking Aviva. When you then include self-insured business, which is trust, that drops our market share down again. The issues with expansion and to your point on profitability, we can grow very quickly into corporate, but we sacrifice profitability, as Neville alluded to in his talk. There is an opportunity in the trust business. But again, you don't want to take yourself down the road where the servicing demand is not met by the admin fee. But we are considering that market growth opportunity. But I think as a starting point, if we can at least -- if we are continuing to grow by at least double the growth or 5 percentage points higher than what the market is doing, we will get to that point of about 20%, which will put us well and firmly into the third largest insurer.

Thank you, Keith. I'm going to keep you online. There's a question from Michael Christelis. The question is, what has the U.K. health claims ratio done in the period since June?

Thanks, Michael. Things have been a lot more favorable in Q1, largely due to the earned premium effect, which has been mentioned in the presentation. We're probably at least 1 percentage point better than our plan. And the anticipation is we will reach plan for this year and anticipating any growth in claims into the new year, be ready to put in higher premium increases if necessary. Or if claims are holding nice and flat, which we're internally hopeful that they will continue, then what we will ensure is that premiums can actually be reduced and improve our lapses even more. And all of that goes to help our risk profit.

Thank you, Keith. Just in order, I'm going to move over to Justin Taurog question around VitalityLife. Are you concerned about the U.K. FCA's investigation into commission payment practices for protection insurance?

David, I think, it's too early to have any view on the outcome. We are actively engaged with both the ABI and the FCA through the review. We see as an opportunity to work together to deliver a positive outcome for the industry for both consumers, distributors and intermediaries. I think key to this is to have a competitive and flourishing protection market. I think there is a concern from the FCA around the exit of some of our competitors from the market, what that means for the industry. And we think this is an opportunity to work with key stakeholders curatively to help shape that future. We've had a significant focus on working with distributors around quality management and using distributor quality management to align with quality distributors and low churn has been the one issue potentially raised. We've had a significant focus on make sure there's quality relationships between us and advisers. And as I say, we're actively engaging and I think we will be able to give maybe more flavor in time.

Okay, Justin, thank you. I'm going to stick with you a question from Daniel from Ashburton. Could you speak to VitalityLife's growth relative to the top 10 players in the U.K. Life market? What is the key to improve profitability here? Is it just scale and time for the SVI model to embed, i.e., more optimizer and multi-benefit and to deliver better underwriting outcomes. And it ends with how does the Life business compare on scale and reach of distribution to its peers?

David, so our growth has been, as I touched on the metrics stronger than the growth in the market. The market has actually been relatively flat over the last 3 to 5 years. And we have grown quite significantly in that market. We are the third largest life insurer in the total market by scale. I think the key differentiator has been, firstly, the shared value model and having a differentiated product. And then also, we have focused much more around that holistic protection model around life insurance, serious illness cover, income protection, that broader package rather than just life-only smaller premium business, which is a difference made between us and the market. And price optimization, I think, everything else has helped to drive that growth in scale. We've always been recognized as a leader in serious illness cover. We launched a product just over 10 years ago, recognizing the evolving medical technology, how we needed to cover that paid out earlier, paid on earlier diagnosis and continued post that potentially first claim. Income protection, we were a smaller part of the market, but that has been a part of the market that has grown quite significantly. And I think as customers have seen the furlough and the importance of having income and if you're unable to work. And that's an area where we have grown quite significantly in a growing market. So in a market that has been flat, our growth has been very strong.

Thank you, Justin. I'm going to shift over to -- in fact, back to Keith, a question from James Shuck from Citigroup. In the U.K. health market, what is the size of your hospital or doctor networks? And how does it compare to the other providers? Isn't scale critical here?

Thanks, James. And you're absolutely right, scale is key. We are over-indexed in the number of Premier consultants that we have as a percentage of our lives. So as I alluded to before, our lives that we're probably at about 15.3% of the market. Our consultant panel currently covers probably 17% of the market at least. The challenge in the U.K. market is that the majority of consultants only work 1 day a week, unlike many other centers where they're in full-time private practice. But this capability, the speed to access and diary bookings, we track regularly and on a daily basis to ensure that when we need to recruit more people into the Premier Consultant panel. So we can keep a close eye on that. As far as our condition networks go, we -- again, we don't allow all willing providers. We limit our hip and knee network as an example, to 2 key players. And so they can at least see the volumes that are coming in from us, and we monitor with them the actual quality of care and availability of consultants.

Great. Thank you, Keith. A follow-up question or a continued question from James. I'm going to bring Deon in here. The question is a broader question around Vitality. In time, would you consider a partial IPO of Vitality to realize value? Can you give any insights into how we should value Ping An, Amplify Vitality Network? And might you provide such valuations at some point as others do with group embedded value or group equity value?

Thank you, David, and thank you, James, for the question. As we've mentioned at results, the bringing together of the global business is all about the strategic execution, making sure. So previously, as we were building that global expansion, I think the structure was absolutely appropriate. But as we go into the next phase of the group's evolution, I think, it is important to bring those businesses together from a strategic perspective, prioritizing the many opportunities that we have globally, investment in technology, deployment of capital, et cetera. So it's all about that -- those considerations. So at the moment, an IPO of the business is not really on the cards. We also don't believe we need capital given that a lot of the investment has been done over the past period. So while it in the long term may provide some optionality, that's not the intention at the moment. Then just on the group equity value, clearly, internally, we do extensive valuations whenever we commence these investments and establishing new businesses. And we continue to refine that as the businesses get to scale and to full momentum. And we also, in certain instances, validate that with external work. We are considering providing equity value at some stage. Obviously, you need a whole lot of pillars to get into place before we take that publicly, analysis of change issues such as assurance framework around that. but it is a consideration. In the meantime, we will -- and that's part of the reasoning for this Investor Day is to try and give as much information as possible on these various businesses as they get to scale. On your question as to how to value these entities, obviously, we internally would look at market opportunity, a number of principles that we apply in building these businesses, and you can see that playing through in Ping An, for instance, is clearly drive towards the growth opportunity, but always a quality business. So what you'll see in Ping An, for instance, is that it makes an operating profit. And in addition to that, you get investment return as an example. And therefore, important to look at the businesses in that context. Very often with shared value, even if you operate at the same margin, it's important to understand that in the background, what the shared value also gives is much greater retention, better risk profile, et cetera, and therefore, overall, a better business. And all of those factors should be brought into account in the valuation.

Thank you, Deon. I'm going to shift back to Justin Taurog. A question comes from Warwick from RMB Morgan Stanley. The U.K. Life market tends to be commoditized and you've been on the receiving end of adviser churn historically. How comfortable are you with the lapse experience from business sold via the adviser portals?

Thanks, Warwick. There has been a significant focus of the business from many aspects and focusing on retention and lapse experience. I think also, if you look more recently, we've been writing more of our business as shared value business with the optimizer embedded in that and had a focus across the business to drive more engagement in Vitality, and we are seeing that emanate. So the book is getting stickier in terms of the product dynamics as a key driver. We also took a number of steps probably 4 or so years ago where we terminated some agencies with higher lapsing brokers where it didn't seem that there was sufficient quality coming through those channels. And we also invested significantly in our retention capability. I think building on what the health business had already built around retention proactively and reactively reaching out to customers before and at anniversary or when a payment was missed. And also the whole marketing narrative around the value of Vitality, the Vitality value statements, what is available there for the policyholder to engage in. And we've seen a substantial improvement in lapses over the past 3 or 4 years. So the volume we've grown has not been at the compromise of quality and lapse experience remains very strong in the Life business.

Great. Thank you. I'm going to move over to Justin Skinner, the CFO of Vitality. Justin, the next question, I'm going to combine 2 questions. Baron from JPMorgan has asked about CSM of new business looks positive within VitalityLife. Can you give some color on onerous contracts and then by how much do they reduce or impact the VNB under embedded value reporting? And Michael Christelis, a similar question. What does your quarter 1 new business margin look like given the strong recovery in new business CSM and risk adjustment that you've shown?

Okay. Thank you, David, for relaying the questions, and thank you, Baron and Michael, for the questions themselves. So Baron, first of all, as you said, a strong performance on the CSM and business, as Justin Taurog talked about. And in terms of onerous contracts, if I look at the full year financial results for FY '24, onerous contracts were GBP 3.7 million as reported in our report and accounts. In terms of the impact on the VNB, we don't separate out onerous policies. It's a very different way of valuing the business. There are some second order tax effects, but it's relatively minimal impact on VNB itself. And in terms of the other question, there was what the size of the new business margin was in Q1. And just the question asked just before Justin Taurog put it into the slides, but just repeat. In Q1, the new business net value was GBP 8.1 million versus GBP 16.6 million in half 2 of the previous financial year. So that's the answer to what Q1 new business generated was. In terms of VNB, we didn't disclose what the VNB was for Q1. So I'm not going to specifically comment on that one.

Thank you, Justin. I'll keep you online. There's a follow-up question from Warwick. How different is the lapsed experience between the original PAC book, which is the old Prudential book for those online and the business written on the VitalityLife license?

Okay. I think I'm back on. Thank you very much for the question, Warwick. The PAC business and the VitalityLife business are very different types of business. So the PAC business was a lot more whole of life business written in a very different interest rate environment. And in particular, the engagement level and optimization level was very low. We've completely refreshed the program mid-2010s. And the VitalityLife business is a lot more optimized, a lot more indexed and a lot more engagement on the business. The lapse experience is very different between the 2 portfolios. In terms of the specifics, though, the PAC business has lower lapse experience, primarily because of the duration of the policies. It's all business written in 2015 and prior. And as time goes on, you tend to get a reducing lapse rate.

Thank you very much. And one further question, and Justin, I'm going to keep you -- that's Justin Skinner. I'm going to keep you online. This comes from Matthew Pouncett from Laurium. For VitalityLife, what is the notional balance of FinRe funding that would need to be repaid through in-force cash flows? What is exactly is meant by self-financing? Does this mean VitalityHealth funds new business strain for VitalityLife?

Okay. Thank you for the question, Matthew. In terms of the notional balance of FinRe, we haven't disclosed it in the past. I'm not going to disclose it now. But just to say we carry out extensive work on it to make sure even in stressed circumstances, the in-force cash flows are sufficient to repay the FinRe balances as they fall due. So we take a very well-risk-managed approach to FinRe. And in terms of what we mean by self-financing, what that means is we require as a U.K. organization, no further equity investment from Discovery, no further debt placements from Discovery or indeed any external form of debt. And we are reliant on new business FinRe in order to fund the business within VitalityLife. The follow-on to that is how does the Health business impact that? And Health does generate cash, but VitalityLife is standing on its own 2 feet in terms of cash generation in its business.

Justin, thank you very much. There were some questions that were posed earlier, and I'm going to return to them as promised. Emile, I'll bring you in on this one. A question from Michael Christelis from UBS. I've always understood you to be agnostic whether a customer is blue or diamond. Your VNB examples seem to suggest that you make more VNB of highly engaged people. Is that correct?

So Michael, thank you for that question. I wouldn't say we're ever agnostic about it because as you will recall, our mission is to make people healthier. So certainly from a customer's point of view, we do want to make sure that people are engaged as much as we can. However, you're right that we've always said that we want the VNB curve basically to be gently upsloping for people at different statuses. Remember that what I showed you this morning is for activity levels, not necessarily status. There's some value that's returned by status. As you know, the premiums are discounted more if people engage more. But also just to give an assurance that what we're basically doing, even when we look at it at activity level and different levels of exercise, for instance, different levels of clinical habits, we want to make sure that we always return some value to the customers. So generally, it will remain true that when you cut the data VNB by status that it will still remain gently upsloping. And for that reason, we are financially secure against changes in engagement, and we would generally want people to engage more rather than less. I hope that answers it.

Thanks, Emile. In fact, I'll keep you online as well. There was an earlier question from Warwick from RMB Morgan Stanley. The question is, will your adoption of AI have a benefit on operating costs relating to client servicing? Or are the benefits primarily related to claims?

So Warwick, we see benefits all over the place in terms of productivity, in terms of servicing costs, all of that is starting to emerge now as we build out this platform. It certainly will help us in claims, on engagement, on lapses. But just to give you the view there that what's important to us is also the quality of the service that we provide. So Justin Taurog just showed you a little bit earlier on how our straight-through processing for underwriting has increased. It's now 79%. That's a significant increase from before. All of that is as a result of AI. It means that our customers wait much shorter periods for a decision that don't need to wait for a long time -- period of time. And it means that we use all of our underwriters in a much more efficient way. So there's many efficiencies to be gained. I think servicing will be one of the areas where those efficiencies are gained. We think though that it's not at the point at all where we're saying that machines will replace humans. That's not really part of what we're planning in the sense that we always think that the human touch is important for people. And in the servicing centers, that will remain for the foreseeable future in any event.

Thanks, Emile. If you can stay online. A follow-up from Leonard Krüger from M&G Investments. Could you expand perhaps on the potential size of the opportunity in clinical and provider habit change? What has Vitality done to date? And how could share value be used here for health care providers?

So we have just started to look recently at the impact of provider habit. We see a lot of it playing out in terms of pathology, how medicines are prescribed, and we think there's enormous opportunity there. And particularly, if we combine the 2 views, the habits that people have in navigating the health care system and the habits that providers have in prescription, admission, all of those sort of indicators. Our aim in that would be to look at quality of outcomes. That would really be the main objective. We want to make sure that when people navigate the health care system optimally from the patient's perspective, but also the care that they get is done in a way that we optimize quality and outcomes for those patients. So we think there are rich veins to explore there. The work is pretty nascent, but we certainly see the principles apply, and we're very excited about the potential of this view.

Excellent. Deon, I'm going to shift the question over to you. The question comes from Cornette from Sanlam. It relates to the Ping An discussion earlier. What do central costs, which Discovery booked through the Discovery income statement to get from the 25 share of post-tax profits for the JV to reconcile the income statement amount that we demonstrate. So apologies, I crypt that off the reading, but simply, what is the link between the disclosed Ping An numbers? How do we demonstrate our numbers? And does this grow -- in other words, the cost base, does this grow in line with the JV's profits or at a lower rate? Thank you, Deon.

Thanks for the question, Cornette. Those costs are central costs that relate to the support of Ping An Health in China and obviously, our investment within that. The -- so it mainly is made up of expat costs. But there are also some other cost overlays. For instance, from a governance perspective, there are, for instance, audit costs that relate to our request directly to the Ping An auditors to provide clearance, for instance, at our year-end because of the difference in actual year-end, we're working with interim numbers when we do our final results. And so we do require certain assurance work to be done by the external auditors as an example. But most of it is expat cost. And we would certainly not expect that to grow at the rate of the growth of operating profit within Ping An. It's largely a fixed cost. It does increase over time as the footprint is required to increase, but will be far lower than the operating profit growth of Ping An Health.

Great. Thank you, Deon. We are actually running out of time, and I think we've come to our last question. Emile, I'm going to ask you if you can deal this with a broad kind of global perspective. The question comes from Warwick Bam from RMB Morgan Stanley. It relates to Vitality engagement. The question is, how meaningful are the differences between Vitality engagement, behavioral dynamics and health claims between South Africa, the U.K. and China? Are there certain demographics or income segments which do not respond to Vitality incentives?

So Warwick, thanks for the question. I think the first thing to say is that the human fundamentals remain the same. So in general, people do respond to incentives, but they have to be personalized. And certainly, when they take healthy actions, we can see the benefit of that in their claims coming through in a very consistent way no matter where we are in the market. That means that those insights are internationalizable. What we're saying though here is that we are going to personalize a lot more. So people are very different in the response to how they respond to the way that we communicate, the reward levels, the types of rewards, but also how we flex the hurdles that they need to meet in order to get those rewards. And that's the power of personalization. Certainly, we can't say the same thing to everybody. And that's why we're building in this flexibility into all of our systems where we are in the world. It will take time to unfold, but what we can see where it's taking effect, where we are live in the market with different hurdles, different rewards and personalized communication, we can see how people reacted and how it lifts the engagement. So we're very positive that this will make a big difference going forward.

Emile, thank you very much. I think that draws to a close the Capital Markets Day event. I, first of all, just Neville to you, to your team and to all the presenters and the people across the globe from our side, thank you very much for the time. We hope to all the attendees on the call that the session was helpful, helped you just get, I guess, one level deeper under the bonnet of our organizational structure, of the business strategy and of the financial and business objectives within Vitality. We appreciate the time you spend today. As always, as an Investor Relations team, we're here to help you understand the business. Please send through follow-up questions, and we look forward to future engagements. Thanks very much for the time.