Good morning, and thank you very much for the time. It is always a pleasure and an honor for me to present our group's results to you. The results today are for the full 12 months to 30 June 2025. At the outset, let me say it's been an absolutely tremendous year. The growth of our business has been really strong, as you can see. Operating profit has grown by 29%, and the other measures tend to follow that. There's a lot to be told today, and I hope I get that across to you clearly. I have to say the performance has been remarkably strong in a very complex and very volatile geopolitical environment. I think it is testament to our people, to our purpose, to our values, and to our business model. We are focused in a very, very complex environment.
The presentation today will take you through, and I said I hope I get it across clearly, four distinct insights. I'm joined by our CFO, Deon, with me here, and then all of our executives are online for questions afterwards that David, you will host and chair. I will do the presentation and take you through four insights. Let me just make them clear upfront so I get them across. Firstly, the growth was robust for the year, and I think robust across the entire group and within the group. The performance within all of the businesses has been tremendously strong. I hope you will see that. Secondly, we're growing strongly, but we have the expectation of growing at 15%- 20% per year for the next five years. We've kind of framed this in turn as a growth corridor.
I think it's been an excellent start to the growth corridor and to the dynamics underlying the corridor. I hope I make that clear to you. Thirdly, the business model itself and the data has become more relevant in a world where some of the key trends are accelerating, and that makes us more relevant and gives us more opportunity for impact and for growth. Finally, very importantly, the manifestation of the strategy now is through two focused business composites: Discovery in South Africa, Vitality globally. I think the strategy is clear, and the growth potentials in each should be evident to you as I go forward. Let me start by just taking you through the performance of the group, the financials, and just getting to the main issues. I said that operating profit grew by 29% to just over ZAR 15.2 billion.
You can see how that's made up in the various two composites: 22% growth in South Africa, Discovery, 70% growth in Vitality globally. On the left-hand side on the table, you can actually see the actual makeup of the growth. In South Africa, Health and Life grew or performed really robustly. Life had a particularly good mortality experience that drove up the profitability. Invest and Insure also had exceptional profitability, Invest growing by 29%. Two one losses that I'll talk to you a bit later about. Discovery and Insure, tremendous performance in a remarkable year, up to 229%. Discovery Bank had a similar year, turned to profitability during the year. In the last six months of the year, the profit was tremendous. The other, as you can see on the chart, an increase of 91%, driven primarily by an increase in Vitality costs.
The counter entry is the performance of the businesses, and that weren't, I think that will recur. Some spend in Vitality, spend on healthy food, spend on travel, et cetera, all of that driving the shared value model, a number of other one loss, but over time that will ameliorate. You can see the SA business growing by just by 22% to just over ZAR 12 billion. We are now nine months into the amalgamation of our global businesses, Vitality. You can see the performance, a variety of different dynamics, but I think the actual progress in this period has been really, really remarkable. Vitality Health and Vitality Life are really strongly growing, turning it around off a lower base, and you'll see the dynamics in the performance in the U.K. has been tremendous. Vitality Network is a principal area for us to expand. The growth is somewhat muted.
There's a lot of restructuring taking place. We have a lot of optimism about their business. There's a central focus on this concept of Vitality AI that I'd like to take you through later. Ping An Health continues to push ahead robustly, operating profit up 7%, actually 10% in CNY, but 22% at the top in terms of Ping An Health itself. Then you see coming down to the bottom, up 70%, driven largely by the U.K., incredibly strong, incredibly strong performance. I want to just talk to cash generation briefly off the operating profit. You can see the cash generation has been very strong. The group generated ZAR 17.7 billion of cash from all the businesses, after new business strain and tax, ZAR 9 billion of net cash, and then after investment in growth and finance costs, kind of net cash generation of ZAR 5.4 billion.
ZAR 5.4 billion, as you can see, after capital movements, dividends, ZAR 1.6 billion of net cash. If you look at that ZAR 5.4 billion and you then compare it to previous years, you can see how rapid and how strong the cash generation of the group has been over the period. It talks to, I think, the dynamics that are underplaying our growth. Let me go to the face of the revenue account and just reconcile the normalized operating profit down to the normalized headline earnings. I think fairly simple. You can see the gearing effect of a flat debt level, slightly higher finance charges, but given the rate of growth of the business, it has a gearing effect so the 29% becomes 33% growth at the profit before tax.
Our tax in the previous year was reduced by the release of a deferred tax asset, so it was, I think, 26% tax rate. That's come back to 29%, so that somewhat has a muting effect on the profit after tax, up 27%. Aligned for compulsory headline items, tax headline earnings up 30% to just over ZAR 9.6 billion. There's not much normalizing now, the IFRS 17, as you can see, and therefore normalized headline earnings up 30%. We've declared a final dividend formulaic that's a 5x coverage, gives you ZAR 2.01. The final dividend, adding it to the interim, gives ZAR 2.88, giving a 33% growth and really working exactly on the 5x cover.
The difference in the 33% to the 30% is really a function of the restatement of the previous earnings, slightly up, and therefore, in a sense, the previous dividend was slightly lower or higher than 5x cover. Therefore, when you get the 5x cover in this period, you end up with 33% growth. All of it, as you can see, from operating profit to normalized headline earnings to dividend, kind of in the same range, and I think holding very clearly. The dividend cover is reapplying it algorithmically, as you can see, to the business. Let me turn to embedded value. Growing strongly, the return on embedded value, 15.7%. I think very importantly over the period, every single one of our businesses has positive experience variances. Every single business performed ahead of expectation. You can see the buildup of the EV.
It doesn't cover the entire value inside our non-covered businesses, but the non-covered businesses' net asset value and kind of starting to build up inside the EV. Of course, there's a lot in the group, the bank, et cetera. It's not properly captured in the embedded value. Let me talk to new business. This is a complicated chart because today the group is not just an insurance group, but banking and other businesses, and therefore you can't sort of have one number to illustrate the growth. Two dimensions of complexity. One is kind of the new business from an insurance perspective and the non-insurance perspective. As you can see, on the non-insurance side, like the bank, we simply sell the income flow and the growth in that income. Another distortion is SESOL-MED. It's an in-house scheme.
It seems kind of an isolated issue, but it was of considerable scale in the previous period. 76,000 lines, I think, that we took on, and therefore that added a huge amount to the base in the previous period, distorting the number somewhat. We kind of took that out and brought it down to the bottom, as you can see. If you look at the new business growth of insurance businesses, up about 8%, you can see graphically on the right-hand side, we continue to kind of grow kind of organically over decades, and I think that's very, very gratifying. If you cast your eye over the table, you can see the incredibly strong growth of Discovery Bank. You can see the muted growth of Vitality Network. I'll touch on that later.
Very strong focus on margin in Insure and Vitality Health that muted the new business growth, but I think we're happy with the outcomes of that. Discovery Life new business was below expectation, and that affected the VMB margin that I'll touch on later. Giving you an illustration of a more complex slide, but hopefully it gives you a sense of the new business playout. I think as I go through the presentation and I get to the actual business-specific observations, you'll see the tactical effects of the new business flow. A way to look at this that might make the analysis simpler, simply the growth in the client base. If you break it up into three components, South Africa grew by 6% fully to 6.4 million individual clients.
Vitality, excluding Ping An Health, which is very large in China, you can see, grew by 25% to over 10.4 million lives, and Ping An Health is of considerable size, growing 17% to over 32 million lives. It gives you a sense, without the complexity, simply how the group kind of is growing in a sense from year -to -year. I hope that illustrates kind of the growth of the group and the core financial numbers. I wanted to talk about the growth corridor because we're growing at 15- 20% here. That is our expectation. It's not guidance, but it's our internal focus on this growth corridor, F2025- F2029.
It's a considerable growth rate, and given our size, if you can grow 15- 20% compound over five years, you end up in a very, very different place after five years in the scale, as I think you would know, quite significant. The question, of course, is how and why, and what are the dynamics underpinning this growth? Let me just take you back maybe 10, 15 years if you followed us. Discovery has been built organically. I think one of our considerable strengths is about building businesses from the start, building them life by life according to a specific purpose and our shared value business model, and that's how we focused growing the group over time. The process and the capital allocation has been in this model.
If you followed us, you will know that's how we operate, kind of starting new businesses, scaling them to an emerging business, and then becoming established. To an extent, our mathematics have been 90% of the profit in the established businesses, 20% in the emerging, and spending 10% on new initiatives. So 90 + 20 - 10 gives you 100% of the profit. Our guidance at the time was kind of different growth rates, obviously, for these different phases of growth. Mathematically, what you find is if you cross-multiply, the capital model at the time had a goal of growing our earnings by CPI + 10%. That was the target.
The complexity of this model, and it really started hitting 2015, is as the group gets bigger, you find that starting a new business has to have a much bigger bet to really start to scale to impact the group given its size. In 2015, we started thinking and planning about the bank, starting that from scratch, acquiring the other 50% of the Prudential JV in the U.K. and investing in that, et cetera. Considerable investment was made over that period from 2015. This kind of smooth 90-20% - 10 started to be much more lumpy. It had to be, given the scale of the group. What it gave rise to is kind of different phases of growth. We illustrated to you this at the previous announcement, kind of unfettered organic growth when the group was still smaller, growing at 22% per annum on the left-hand side of the chart.
Normalized profit growth at 22%. The spend on new initiatives was around 8- 10%, and that was our guidance. We spent around 10% per year on new initiatives as we grew the business. You can see ROE was high, cash conversion was around 60%, very little debt in the group, and dividend cover around 4.5- 5x, 4.5- 5 x. As you went through this complex phase, you can see the effect of it. When you're building a bank out of organic profit, your profits come down and your CAGR of growth comes down. The spend on new initiatives went up dramatically, debt went up to fund debt, and dividend cover went down. Through COVID, the dividend was suspended, etc. The point is that we are through this process now, and to an extent, I think in a very, very strong position. All the investments made are scaling.
We've culled anything that doesn't work, and we've got to a stage where the group now has two distinct composite businesses, as I mentioned, and very importantly, in all of our businesses, strong, strong potential for growth. Therefore, the point we made at the last announcement was kind of an anchoring around this idea of a corridor of growth for the next five years of 15- 20%. The kind of metrics falling off that are spend on new initiatives, 5% or thereabout. We don't believe you need to spend that much on new initiatives. ROE between 15- 20%, cash conversion 60- 70%, and dividend cover at 5%, but potentially coming down. To an extent, that's kind of framed the phase of growth that really characterizes this corridor for 2025 to 2029. The reality is that the year under review has been kind of outside of that corridor.
It's been quite exceptional. When you plot it graphically, you can see over time just how the group has grown organically, and you can see how the last year has grown as well, and the previous year. You see the effect of this kind of corridor of growth starting to emerge. I think an absolutely excellent start to the corridor of growth. What's gratifying is the outperformance is not in any one area. It's actually throughout. If you look at the kind of analysis of the growth on the right-hand side, you'll see that we expected South Africa without the bank to grow at around 10- 12%. It grew at 17% on the back of Discovery Life, Discovery Invest, and Discovery Insure. A lot in the South Africa business. The bank gave us super growth, the up 5% in the U.K., and Vitality Global gave the extra 8%.
You get this 29% outperformance of the corridor. An interesting question is, if you pull us all together, we're now kind of out, we've moved off that old organic growth model. The question is, did the CPR + 10 % work? It is quite a lumpy, difficult process. Interesting, if you go back 15 years and you kind of do the work before the investment, that investment period, you find that in fact, that's exactly the case. The 15-year CAGR is about 14%, which is around CPR + 10% on a weighted average if you look at various markets we were in. In fact, if you project forward at the end of the growth corridor and you do the same thing, you'll find the same CPR + 10%. The mathematics has worked, and the original kind of organic model has worked remarkably well.
I would say to you, a difficult phase, a complex phase of building the bank, building out the businesses, but we've got to a dynamic now that illustrates the ability to grow at 15- 20% over five years. Let me be clear, we're kind of slightly out of that corridor, as you can see. We've tried to show how that compound growth effect takes place, and compound interest, as you know, is incredibly strong. If you compound growth by 15- 20% a year, you get a massive growth in absolute terms. You can see we've kind of popped out of the corridor. I want to be clear, that corridor is important to us, and we'll fit into the corridor over time. This year was, in fact, I think, quite remarkable.
It's also important to show when you look at the other metrics, we are again outside of the corridor. The 29% growth is clear, but the spend on you in this period was lower than 5%, around 3%. The ROE climbed to 15.4%. Bear in mind, the bank is a drag on ROE. If you've got a massive capital investment without profits or losses, that has an effect on ROE, but that's coming through nicely now. Cash conversion, as I showed you before, nearly 77%, and dividend cover, we've declared a five times dividend. When you look at the numbers over time, I think we're very comfortable with how they've played out. Cash conversion is improving. All of our entities are strongly capitalized. The FLI is decreasing. Our debt levels, our financial leverage ratio is decreasing to around 16.8%, as you can see.
Therefore, now we're in a very, very different phase. The capital allocation framework, I think, is very rational, and it pivots really on this idea of normalized profit growth and ROE on the other end. Essentially pivoting on that corridor of 15- 20%, the cash conversion coming out of that then determines the strategic choices we make, how much we spend on you, what leverage we have, and how much dividend we pay out. Therefore, the manifestation of all of that pops out as a return on equity, and the cycle starts again. To an extent, this replaces the old model, and I think it's a very, very rational way of thinking about how the group will grow. The metrics, I think, are very coherent and very strong. As I said, we're confident of the 15- 20% growth. We're confident of the cash conversion.
The spend on you, 5% seems a lot lower, but 5% in actual monetary terms, if you think about the growth, yields about ZAR 5 billion- ZAR 6 billion of money to be spent during that period. We'll think about that as we go forward. I don't see us starting new businesses given the scale of the group, but we're investing a lot in Vitality AI and other new initiatives, and you'll see that play out that we think 5% is sufficient. Our mathematics show that around 15% is the right leverage level in terms of the risk return on capital optimization. So 10- 20%, which is where we are, is actually very, very comfortable. As you've seen, I think the cash generation of the group and where we are, it could support a more aggressive dividend over time. We'll think about that. The options are there.
We are at this stage at a 5x cover. The ROE at 15- 20%, you should see that climb above 15% quite quickly as the bank starts to scale, et cetera. That's kind of the framework of the capital allocation model. I hope I kind of explained of strong results and a pop out of pop outside of the corridor initially. This has been a great start to that period. The group is very well positioned for growth going forward. It's a good segue, I think, to the actual business model because growth, of course, doesn't come from financials. It comes from actually the ability to compete and win in the marketplace, the ability to add value to our customers. That's where we focused. The group has very, very strong growth platforms, primarily around our business model.
If anything, we have actually focused more on the singularity of the Vitality shared value model. The point of this is that the trends that underpin our business model, if anything, are accelerating. Over many years, we've presented the same set of trends that we believe are formative. While we live in a very complex geopolitical world, there are a number of fundamental trends in our space that are critical. Understanding the nature of risk not being pre-existing, but the behavioral aspects and the causal aspects of risk in mortality, morbidity, banking, driving, etc., the power of technology, the power of demography, and of course, a shift towards companies being less transactional and much more engaged and having a purpose.
The point of this is that these trends are accelerating at a dramatic rate. There is just continual evidence, not just from us, but across the board of the causal effect of behavior. Issues like sleep, you'll have noticed Apple, I think, two days ago, launched a sleep part of their watch. There is just a continual flow around understanding causal effects of sleep, nutrition, prevention, etc., and what that does to mortality, morbidity. We're uniquely positioned to understand the data, causal correlation effects of that. Technology is accelerating tremendously. For us, the event of AI is just so powerful and so exciting. We have a unique data set in that regard, and our ability to use that is incredible. We're not hyping up or getting caught up in all the hot air around AI.
There will be many aspects of it that will not materialize, but at the core, the potential of it is quite tremendous. I think the idea of Moore's law that every 18 months, things double in technology, AI could really change the calculus of that significantly. At the same time, in the healthcare space, massive technology, GLP-1 agonists, Ozempic, Manjura, etc., changing a lot of aspects of healthcare. Driving up cost, but driving better health. Again, dynamics that we are very well positioned to work with. The demographic issue is important. The world is depopulating, except for sub-Saharan Africa. That means people are getting older, chronicity is increasing. It has a massive knock-on impact on healthcare systems, on social security systems. Governments with limited fiscal room and high levels of debt will bat in terms of national health systems.
That means health insurance, social security, our kind of markets are likely to grow. Our shared value model is so well positioned to do that. If anything, over the period, the actual acceleration of these trends has been very favorable to us. I would put to you that our group has the most unique data set globally, over 25 years of data, two dimensions of data. This is a complex diagram, but hopefully shows you two dimensions. One is kind of behavioral data, wellness, fitness, behavioral clinical data that we kind of merge together, and then operational data. We have 25 years of structured and unstructured data. You can see if you go through the slide, we're providing a massive amount of work on our individual databases, all of the internal data pipelines to integrate the data. Over 100 AI models developed across the group to work through this.
This really powers both the Vitality shared value model, but also the operational efficiency and the ability to meet the needs of customers. I'd like to demonstrate that to you in a few moments of how that can work. It provides the most remarkable power. I thought this was interesting to show you about how the data kind of shows interesting cross-sectional, not only observations, but fundamental issues that affect our business. For example, we're doing a lot of work on sleep, its causal effect on mortality and morbidity. What we find from the data, and you can see on the left-hand side, is REM sleep and the quantum of REM sleep has a dramatic impact on the potential for driving accidents. Fatalities and accidents have a tremendous correlation to how you sleep.
That has a huge impact on how we think about incentivizing people, helping them sleep better, et cetera. These cross-sectional observations are fundamental to how our model will form over time, but the ability to actually build a shared value model in a very different way as we go forward. What is happening to our group is it's kind of focusing down on the Vitality shared value model, making sure that all of the learnings, all of the data is available to evolve and to kind of distribute across the markets that we're in. To an extent, I would tell you that the evolution of the group is from kind of this business by business, kind of the insurance or banking entity sitting on Vitality to a centralized idea of organizing a principle of Vitality AI, data, risk assessment, next best actions, integration, simple UX.
To an extent, where we are trying to head to, and we're moving quickly in that direction, is really two manifestations to our customers. If you're in South Africa, Discovery will appear on the Discovery Bank in a way, and everything is in that universe, in that composite. You can control everything. All the products work together. That's the idea. Everything sits in this kind of super app in a way. Globally, Vitality AI will manifest in a very simple three-dimensional way of dealing with customers, where all of their health issues sit on the face of the mobile. Again, control, access, rewards, incentives, etc., is centralized. Taking the complexity of the entire edifice and putting it simply on the face of the mobile. This is not an insurance offering. It's really a consumer offering in a very, very different way.
Given the rates of engagement, the rate of using the bank, for example, in South Africa provides a very, very different value proposition. Let me get to the last section of just talking through the businesses and give you a sense of where we're at, and particularly the two composites. As I said at the outset, the group is now focused in two distinct composites: Discovery South Africa and Vitality globally. I made the point about the growth, 22% up and 70% up globally. I'd like to give you a sense of those numbers per business, but also try to give you a sense of the strategy. Discovery in South Africa is a composite of exceptional businesses, all of them focused on leading in their markets and focused on the Vitality shared value model consistently. Making the point, more and more focused and streamlined and consistent.
The strategy is actually a complex one, but in fact, three very, very simple, profound steps. Number one, scale Discovery Bank, profitability and scale and functionality. Number two, make sure every one of our businesses is number one in its category, not just in terms of margin and market share, but from a customer perspective, consistency, coherency, how it uses Vitality, how the incentives are built collectively together. Thirdly, put them onto the face of the bank. The bank has the payment rails, the security. It has all the structures it's used all the time. Therefore, getting back to this concept of a super app that controls the composite, every product sits on the bank, and our customers have a unique experience. Getting that right provides, we think, a considerable, sustainable, competitive advantage.
It'll add unique value to our customers, and it'll bring onto the face of the bank the best products that are out there. That's the idea. Central to this, of course, is Discovery Bank. The performance has been absolutely tremendous over the period under review. I made the point about its made-in profits in the last six months of the year. You can see that on the right-hand side of the chart, but you can see across the board, very strong growth. Total clients grown by 30% to over 1.2 million. Total accounts over 3 million. Deposits continue to grow. The advance is growing faster now. You can see the revenue growth, the NII and the NIR growing by over 31%. It's just over $2.4 billion. The quality of the clients continues, and that's, I think, one of the hallmarks of Discovery and Discovery Bank.
You can see advances book growing nicely. Our home loan book is now over ZAR 2 billion. We've launched personal loans, early in that launch, but that provides considerable utility, not just to the bank, but to other areas of the group, like Discovery Health. You can see the credit loss ratio remains very stable and way below the market norm. Importantly, one of the hypotheses of building the bank was that people would bank with us from a primary perspective. You can see on the right-hand side, we see when people take up more products, the kind of percentage of wallet being used by the bank is very, very high. We're getting considerable traction and engagement. I think one of the central questions, of course, is given the rate of growth of the bank, are we getting the right quality clients and is the quality staying where it is?
We thought that this analysis provides a very interesting kind of conclusion to that question. What this does is kind of a cohort month-by-month analysis of how people or customers come in and how they use the bank over time. What you see, maybe focusing on the middle, is kind of the NIR, kind of the transaction, the fees, how people are using the bank from a transactional perspective. You can see that they come in quite quickly. They engage, and thereafter, over 12- 24 months, that engagement level typically grows by 50- 100%. What is interesting is the growth is strong, but importantly, cohort by cohort, it doesn't change much. It really does answer the question that we're attracting the same kind of clients on a continuous basis. Therefore, on the right-hand side of the chart, from a profit perspective, you get kind of a gearing effect.
You get this increasing engagement, increasing growth, and of course, given a digital frame, kind of the cost per member or cost per customer coming down, and therefore driving up the profitability of the bank. The performance, I think, has been very, very strong over the period, ahead of expectation in every regard, and the bank has turned to profitability inside of the amount of capital that was earmarked for it. We're very pleased with the process of the bank. I wanted to make this point to you, and I think it is important. We built a bank on four distinct hypotheses. Firstly, we could build a full retail bank, so not a skinny bank, but a full services retail bank. Secondly, it would be based on the shared value banking frame.
Thirdly, digital first, and entirely digital in a sense, but access to, obviously, to people through the process, but a digital-first bank, but obviously with data and AI that provides a unique opportunity. Finally, the point I made, I hope you will see that, is the actual, the operating system of the composite, the organizing principle, and giving our customers a unique kind of one-touch approach to the bank. What has happened, though, is the manifestation is it is the fastest growing retail bank in South Africa. Importantly, what's been a number of kind of different hypotheses has merged together to form massive opportunity. To the power of the data and the power of AI, we now have the ability through AI to offer our customers kind of end-to-end service on an AI basis. That doesn't mean that they're not interacting potentially with a human touch if they want.
I wanted to actually demonstrate to you, if I can, I hope I get this right, just on the face of the bank, what you can do. It's quite remarkable. There were kind of four distinct things I wanted to show you how easy it is to do. Firstly, simple stuff like operational stuff, getting a tax certificate easy. Second, checking a fraudulent message, almost multimedia capabilities through AI. Thirdly, agentic AI, the ability to actually pay accounts through WhatsApp, essentially through the power of the bank. Finally, to the issue of the composite, while you're on the face of the bank, you know, take out a motor insurance policy through Discovery Insure. Essentially, that is what the bank can do, kind of just on the face of the mobile. Let me play this demo to you. I hope I get it right.
It moves quite quickly, and let me just try and call it out. I'm on the face of the bank, and essentially, firstly, going to WhatsApp, I touch on Discovery Bank, and I say hello. It greets me back, and I ask to do things, and immediately it needs to go into the bank, as you can see, to authenticate me, which it does quite quickly. I accept I'm chatting with Discovery AI. I come back to WhatsApp, and I ask her for, firstly, can I have my tax certificate? At the touch of a button, it pops up with choices. Once I do that, the tax certificate pops up quickly. I then come back and see that there's a fraudulent message. I take a picture of it, worried it's fraud. I simply send it to the bank, take a picture of it. Is this fraud?
On WhatsApp, the bank pops up immediately. Yes, it is. It's worried, and it notifies our fraud people. I then make a payment to a friend, Jack, brings up my contacts, asks me a few details about it, and gone. It's done and dusted. I then turn to the face of the bank, pay through my carousel, all of my products, and say I don't have car insurance. I'm going to take it out. In five to ten minutes, that is activated. Giving you a sense of what the journey can do, what the bank can do, is incredibly powerful with all of those things coming together, with the data, with the model, with all the aspects of it. Therefore, the bank in and of itself offers considerable power, again, making the point of its ability to act as an organizing principle and the face of the composite.
To our customers, we think the value proposition, the ability to sell products, to offer value will be unique. Let me turn to Discovery Health. Discovery Health is so complex, so important from a national perspective. I can never do it justice in a simple presentation. It's an exceptionally run business, an exceptionally run health insurer by global standards. The performance continues to be robust, normalized operating profit up 7%. You can see membership growth nicely, just below 4 million. New business, ignoring SESOL-MED, the bump in the previous period, up 12%. Good traction in the period under review. We're getting a lot of growth in the non-scheme market, Gap Cover, Flexicare, et cetera, growing 18%, not insignificant, nearly 450,000 lives. We always show this particular slide on the strength of the Discovery Health medical scheme.
You can see its market share in the commercial, the open scheme market, now 58%. It dwarfs any of its competitors. It is of considerable national importance. The important point is you can just hear how steady it is. The kind of buy-ups, buy-downs remain at the kind of 5% or less level. 90%, 95% of members don't, in fact, change their plans. You can see the lapse rates tend to stay stable, and the solvency levels, ZAR 32 billion of solvency capital sitting in the scheme. I guess the point I wanted to make here is not only the strength of the scheme, but kind of the paradox, the narrative around private healthcare's volatility, sustainability, buying up, buying down, the perception of considerable threat and volatility. In reality, our strategic view is the opposite.
With aging, with the need for healthcare, with all the various issues, and the actual fact that technology and healthcare drives costs up, the spend on healthcare is likely to increase, not decrease. The stability of what we're doing is fundamental. Discovery Health continues to power along, meeting the needs of members. There's a whole slate of things that will be launched to our membership base, going into 2026 in a few weeks' time. The rate increase, keeping trying to work hard to keep costs under control, a number of different options, a key area in this idea of personal health pathways, Vitality AI, of personalizing what you should do, why you should do it, et cetera. You'll see that playing out in the next few weeks. The performance has been very, very strong.
I wanted to demo for you also, coming back to the concept of the bank as the composite and how, in fact, it can play that role in the context of healthcare and personal health pathways. This is, in fact, my own health data that I'm showing. I assume the bank data has been changed, but what it will show you here is I'm on the face of the bank, right? That's kind of how it looks. You can see my portfolios across the board. I've just bought that motor insurance policy from the previous demo if you give me that credibility. That's kind of where I sit. I now scroll through the bank and go down to the health issues and the personal health pathways.
You can see that it's got a number of personal health pathways for me, and there's a number of things that's recommended that I do. A prostate screen tells me what I need to do. It gives me considerable rewards in terms of miles, in terms of money of my personal health fund. Also, now it gives me context. Work we're doing now on AI that actually tells me, from all the data health issues, it went through the first piece. It actually picked up some potential thyroid elevation and suggested I see my GP, which, in fact, post this demo, I actually did do. It is nothing, fortunately, that I need to do, but it actually talks to the granularity of the data. It also picks up, it's getting those sleep data from me.
Now in this new world, we want that sleep data and it encourages me to actually start using a device and sharing my data. It's providing absolutely personalized recommendations, incentivizing me, providing me context for that. Of course, that has a tremendous impact on getting people to do the right thing at the right time in the right way. That's critical to making people healthier. What is interesting is the personal health pathways has rolled out properly over the last six months. You can see the rate of growth. Fully, 360,000 people have activated on it. You can see nearly 70% of people are chronically ill, which is exactly what we want. We need the chronically ill to actually engage. On the right-hand side, you can see how strong the behavior change has been.
Kind of a five times increase in total number of completed health actions across the board, from next best actions to complex screening, etc. If you look at the dark blue 2024 to the light blue in 2025 with personal health pathways, you can see the dramatic change in kind of the traction of getting people to do the right thing. It's early in the evolution, and this will play a considerable role in bringing healthcare costs down for the Discovery Health medical scheme, of course, driving the health of our people, of our members, and critically also the training of these models and how we can use them globally. Discovery Health, I think, had a tremendous, tremendous year. Watch out for a number of things that are coming up in the next number of weeks. Discovery Life's performance was exceptional.
You can see the normalized operating profit up 14%, on the individual side up 11%. The fundamental driver has been a tremendous mortality experience, and that generated a lot of cash. You can see the Discovery Life cash generation climbing year by year, reaching ZAR 3.3 billion in this period. Capital liquidity has been strengthened. New business, as I said before, is below expectation. Individual life new business is down 2%. The quality of the business is exceptional. We keep a very strong focus on quality, but the volume has an effect on the VRNB margin that I'll touch on in a moment. In terms of mortality, this is a busy chart on the left-hand side, but we did want you to see it.
What this shows you effectively is 100% what we expect mortality to be, and then what we experienced, not being on Vitality, blue status, bronze, silver, all the way down to the diamond status. The three bars are the long-term assumption. The first bar, the second is the last four years, and the third is the experience this year. What you see is the tremendous dropdown of mortality versus expectation. Particularly, you can see non-Vitality to diamond Vitality, nearly an 80% difference in mortality rates. The experience is quite tremendous, and it's illustrating how the model classifies, categorizes, and causes better mortality. Therefore, on the right-hand side, you can see the cash generation coming out of all the various operations of Discovery Life, but of course, the additional performance of Mortality, a 60% cash conversion to ZAR 3.3 billion.
It paid ZAR 1 billion in dividends to the group, refinanced some of its debt and some of its financing structures, and kept about ZAR 1 billion or so in its own belly as it grows going forward. I think a very, very strong performance. In terms of build-up, the embedded value, positive experience variances of ZAR 1.2 billion. You can see the strong mortality and morbidity experience. In the middle of the chart shows the new business issue. Our margin in the previous year was 3.8%. It's down to 2.1%, primarily, as you can see in the analysis, because of lower volumes that end up costing you more per unit cost per policy, and that somewhat erodes the margin. Again, if you look at the return on capital, it was 20% rate of return on the previous block of new business.
It's dropped to 18.5%, still a very, very attractive return on capital. Work to be done in terms of driving that up, and you'll see that playing out in the next six months. Bringing it all together, you can see the growth in embedded value, 15.7%, positive experience variances, the unwind of the discount rate, et cetera, the payment of the dividend to the group, and therefore you get this 15.7% annualized return on embedded value. A very strong performance and I think well positioned going forward. Let me turn to Discovery Invest. Very strong performance, 29% increase in operating profit. You can see assets and administration up 15% to ZAR 179 billion. New business looks somewhat muted, but in fact, guaranteed bonds with low rates of interest are less appealing. That drops off so that it has that effect.
I think amazingly, if you look over the last 10 years, Discovery Invest has been third biggest in terms of net flow. It really has gathered assets. The 29% is flattering. There were two one-offs, an accrual of tax that we could release, policyholder tax that we could release. The other was kind of a matching gain from our guaranteed portfolio. That kind of bumped up 15%- 29%, but regardless, a very, very strong performance. The business, I think, is very well positioned strategically. We are clear that we are not an asset manager. We've had many debates over the years about that, about us doing that kind of business. We don't. We work with, we believe, the best. We work with Ninety One in South Africa and work with BlackRock globally.
It's given us a considerable range of expertise, considerable leverage, and I think the ability to offer value to our customers. We have a fantastic partnership with BlackRock. We are focused very hard on building our DFM cogents, Gunnarsi, during the period, assets under management, over ZAR 28 billion. In addition, BlackRock is allowing us to offer unique value propositions to our customers. We launch private markets to our customers that you can access through the BlackRock technology. Importantly, we continue to pioneer around the idea of shared value and how we get behavior change in long-term savings. It's a fundamental issue to get people to understand the risks that they're around, the right asset management choices, of course, but importantly, to save the right amount, save earlier, save longer, and retire in good health if you can.
In the period under review, we launched this kind of guaranteed income from age 80. For the first time, bringing probabilistic theory into living annuities. If you live beyond 80, your income gets boosted to give you that protection. A number of different exciting propositions are forming out of the partnerships we have in Discovery Invest and we are very pleased with the performance. Let me turn to Discovery Insure, an absolutely tremendous year, as you can see, operating profit really jumping up to over ZAR 800 million. We've been very focused on quality of new business. The new business is down 2%, but there is a strong focus on margin. You can see the revenue driving by 8%. If you look at the actual performance, there's been a reduction of the loss ratio of the claims level by about 10%.
Across a range of issues, it has been a fantastic period from a weather perspective. You can see in that chart the 2.8% or 2.5% of weather variability that, in fact, didn't happen. To an extent, 2.5% of that 10% or 11% improvement is because of better weather. The other piece, the 8% or 9% thereafter, you can see if you go across the chart, that reduction is from a range of activities, pricing activities, underwriting activities, going through every single claim initiative, having a tremendous effect on the loss ratio. This team has done a remarkable job. On the right-hand side, the focus, as I said, on the quality of new business, you can see that superior risk profile now makes up 90%- 95% of the new business coming in. A real focus on quality manifests in considerable cash generation and considerable profitability. The business is well positioned.
I wanted to segue into something that you may think is actually unimportant, but it is important, and that's the issue of potholes. The pothole initiative of Discovery Insure is kind of important on a number of levels. The first issue is just simply the issue of shared value. We've been having considerable claims over the years about potholes, and the naive view that if you fix the potholes, can you kind of reduce the claim level? The answer to that is yes. I think the second and third points are more important. The second is just the team's belief that they can make the environment better, kind of the values and purpose of our organization, that we can fix things at scale. The third thing I wanted to say is in the city of Johannesburg, we fix potholes.
It kind of evidences that you can make a considerable difference, not anecdotally, but really systemically. What I wanted to show you is a simple demo here of looking at Johannesburg and kind of just the map of Johannesburg as it was. We started the pothole process in 2021 with a considerable vision of working with the city to fill all of the potholes. We have teams across the city doing this and working over time. What's amazing is if you go through the years, you'll see what has happened kind of month by month to the potholes. It is quite remarkable that we have filled over 300,000 potholes over the period. You can see the scale of where they are. They're everywhere in our city.
In fact, if you go down to, if you kind of, if you zoom into any area, this I think is a park or Rosebank area, wherever you may be, you'll find every street is marked with our pothole, our potholes being filled. Really illustrating the power of what has been achieved. As I said to you before, we can fix things quite quickly with the right execution, the right focus, the right collaboration. It's an amazing initiative, and it kind of talks to, I think, the spirit of our group, the spirit of the amazing spirit of our team on the ground, but that you can make a difference quickly. In fact, if you now do the numbers, although it costs money, the savings for us alone is sufficient to pay for the initiative. Of course, our other competitors get the benefit of that, and that's a good thing.
You know, that's a good thing. It's now public good. Let me end Discovery South Africa with just clarity on where we are. Excellent businesses in the composite, more and more forming around this idea of a centralized approach to Vitality AI, and then sitting on the face of Discovery Bank as we go forward. I'm turning to Vitality, our global business. It is now nine months since the amalgamation of all of our businesses into one focused area under one leadership structure, governance structure, et cetera. It's been a frenetic, but I think very, very successful period. There have been four phases to the amalgamation. The first, the exploration; the second, a very, very different operating model put in place, different governance structures, different executive structures, et cetera. A strong focus on growth and efficiencies, a reworking of certain headcount in certain areas. Now phase four, regionalization.
While the business has been built in businesses, we will be going forward regionalizing in Asia, U.K., Europe, the U.S., et cetera. You'll see that playing out going forward. Critically in phase IV -B is this very big initiative of Vitality AI that we will launch on November 4, 2025. There's a lot happening in the businesses. There are three very big businesses: Vitality Health, Ping An Health, and Vitality Network, and then Vitality U.S. and Amplify Health. I won't say much about the last two, but to make the point in terms of Vitality Health U.S., our Wellspark acquisition has been successfully integrated and performing ahead of expectations. Our pivot to health plans has gone very well. We've signed up a number of health plans, and we're working very closely with Emblem Health, a major health player in New York.
The Vitality AI platform that has been built will roll out from the start of 2026. In terms of Amplify Health, to make the point, it's taken a long, long time. Let's move very slowly, but we're gaining traction now. A lot of push from AIA into their markets, into their business units, and to external clients. There's been a successful deployment of the integrated product package, and it's now in four markets, and we'll roll out strongly in the next period. Expect improved financial performance and increased revenues that will drive that business. Much to be done. The next year is important for both of these businesses. Let me turn to the three businesses: the U.K., Ping An Health, and Vitality Network. The U.K . has had a tremendous period. We felt giving you kind of a composite view of the U.K . gives you a sense of the scale.
We cover now over 2 million lives in the U.K. New business has grown strongly by 14%, operating profit jumping up tremendously, and total premium income up 15%. The positioning of our U.K. business, I think, is quite unique. It's a financial services company. It's an insurance, health, and life insurance business, but it actually has a consumer brand. Amazingly, one of the kind of complex things for us is to build a brand against very complex, massive competitors that have been around for decades, if not centuries: Aviva, AXA, the Prudential, et cetera. You can see on the left-hand side of the chart, the brand awareness actually has surpassed our competitors. We have the ability now to make this claim that if you're with us, you can live five years longer in a highly regulated market of the U.K.
That has required a lot of research and working to be able to make that statement. It creates a very different kind of brand. Of course, our assets like Stanley, our dog, our round, our pink Ramble does remarkably well. You see it playing out across many aspects in the U.K. and provides a fantastic base for us to use that globally. The business is well positioned. Vitality Health had a tremendous period. You can see the drop-off in IFRS 17, but now climbing nicely. The fundamental issue has been the operating margin with complexity in the NHS, and I'll touch on that in a moment. Last covered growing to over 1.1 million. I made the point there's been a very, very careful focus on segments of business where we believe profitability is present. We are not competing on price in the wrong markets.
New business is up to GBP 121 million, but 3% up. You see the premium income jumping by 16%, really on the work done around margin. The major issue, and there's so much complexity to this, but simply put, with the NHS and its difficulties, there's been a change in kind of the demand for PMI. Certainly, the claims profile and things that people claim for under PMI, and that is manifested, as you can see on the left-hand side, to a massive 20% increase in claims over a very short space of time. That increase, of course, is ahead of the premium increase, and we've had to follow that up over time to regain the margin.
You can see from the left-hand side of the chart we've actually managed to achieve that by repricing very, very carefully in an equitable, fair way to make sure that we actually catch the claims curve. Importantly, in the middle of the chart, you can see how Vitality shared value model has worked. You can see the lapse rates are 15% less than we expected, despite the pricing up. Of course, lapse rates go down by status. You get the right kind of engagement. You get the right kind of selective lapse ratio. On the right-hand side, you can see at the margin, which should have been about 7.5%. That is the target. It climbed during COVID with lower claims, came down significantly, and now has climbed back, not quite there, but getting there quite strongly. That really explains the turnaround, as you can see.
In Vitality Life, strong growth in normalized operating profit is up 70% off a lower base. Very strong. I think the story of Vitality Life has been the strong new business growth, 28% to over GBP 106 million now. I have to tell you that Vitality Life has been a business of considerable complexity. If you follow us, you will know over many years, many of the steps taken to get the business to scale and to profitability. We are very pleased by the performance. Every aspect of the company has kind of come to fruition. I think the major challenge in life insurance is making sure you can get the right return on capital and the scale of new business.
You can see the step change in new business up 28%, as I made that point, a function of many more advisors selling more products for us, as you can see, they're growing by 30% over -the -year. We are now the third largest market share against very big competitors like Aviva, Zurich, LNG, etc. Growing to over 13% market share. What is important is the ability to use our Vitality shared value model to be competitive, but at the same time to make sure that we are profitable. The main issue, and this is a fundamental competitive aspect of the model, is we have the ability to price competitively to make sure once people come in, they flare out based on the engagement, which is entirely equitable. In the U.K., which is the fourth largest market in the world, it is exceptionally price competitive.
Advisors and intermediaries use portals, pricing portals to actually sell. Therefore, if you're not competitive on price, you get crowded out very, very quickly. What the left-hand side shows, I'll point to one issue, is our optimizer product, which is really the Vitality shared value linked product. In 54% of cases, it's at the top of the portal. More than half of the times we quote, we are the cheapest on price, but in the middle, not the lowest on margin. Quite the opposite. We maintain our margin, but in fact, the manifestation of profit comes through margin and growth, a 73% growth from kind of increased volume of sales. You get this massive jump up in value of new business that we've generated from GBP 16 million to nearly GBP 54 million, as you can see.
That, of course, has a very strong effect on the ability to maintain or grow the CSM. The U.K. is very well positioned, and I think we're very pleased with the performance. I want to talk to the Vitality Network. This is a business for us of considerable opportunity. It is really the business that we believe we can scale the IP across the world, and we can really revolutionize insurance. It's a business that has the most remarkable partners across the world in many countries, national champions that work with us. The relationships are exceptionally strong, and we are proud of those relationships. We are working hard to make sure that we can scale this business. In the period under review, there's been a considerable amount of focus, restructure, and you'll see that, and the rationale for that, I think, in the faceplate.
Firstly, to make the point, if you look at the growth of our partners using the product, it's been tremendous. If you look at the total integrated new business written by our partners, nearly $2 billion of new business, nearly ZAR 35 billion of new business, a considerable volume, 27% growth in the number of memberships to over 6.7 million, as you can see. If you look at our size, our profit has grown by 7% to $30 million. This business should be bigger and should be growing stronger. This profit itself is a function of a number of one-offs up and down as we've kind of restructured, but our aim is to really grow this business substantially. Our conviction comes from the effect the model has in different markets, and the effect tends to be entirely consistent, strong, and entirely coherent, as you can see.
This is the latest data from the South African experience, the U.K. experience, Sumitomo Life in Japan, which is the third largest life insurance market in the world, and John Hancock in the U.S., which is the first largest. You can see we've shown this data many times, but it tends to get better. Levels of engagement are very, very high. Claims rates come down as people engage in a very predictable way. You can see in Japan even better than other markets, and lapse rates come down as people engage. You get a selective lapse force, and it kind of strips out the inefficiency of traditional life insurance and health insurance, which provides considerable economic value. You can see the same in John Hancock. They measure it slightly differently, but the numbers or the direction tend to be exactly the same.
We have a deep conviction about the effect of the model. We have great confidence in how it is growing globally, but we need to make sure that we kind of scale the business. That scaling of the business in this restructure is a function of three distinct things. Firstly, working with our partners in certain key areas to restructure certain aspects of it. In the case of Sumitomo Life, it's their most remarkable partnership. They're growing strongly. They're committed to getting to 5 million lives by 2030. We've restructured and resimplified the contract to make sure that we capture some of the emergence of that value over time based on performance. In the case of AI, we are now jointly investing back in the program, working through all of the systems to bring the hyper-personalization of Vitality AI thinking into the business.
We've mutually terminated the Generali relationship in Europe. It was holding us back, and there was a mutual agreement from their side that we just were not mutually benefiting from the partnership. That has opened up all of Europe for us. The second point in this is the rollout of Vitality AI. As I made the point, on November 4th, we will launch globally Vitality AI, and it's leveraging virtually everything we built into one focus capability, one piece of technology we can inject into hopefully every insurer around the world if we can achieve it. Thirdly, rapidly pursuing areas in North America, but particularly in Europe, given the Generali termination. We now have teams in Europe working through this, talking to many insurers about signing up as many as we can partners as we go forward. You will see on November 4th the rollout of Vitality AI.
I don't want to give away all of the components, but as I said before, it really is the ability to bring massive amounts of data, very sophisticated dynamic risk assessment techniques, using AI to get next best actions, providing proper incentivized engagement, as you saw on my own personal health pathway. That is, personalized, spoken to me in the right way with the right kind of incentives, and then the ability to integrate that into the pricing of insurance. This requires global reward partners. We're working with a global panel of reinsurers. We're working with certain tech companies to be able to deliver this data and this deep engineering of AI. The power of it, as I said before, is a manifestation to the client of a very, very simple interface, as you can see, that really controls every aspect and offers the customer real, proper personalized guidance.
Our conviction on this is not just the actual, as I said to you before, the kind of the correlations and the causality and how you see lapse and claims, but if you actually look at the work done for the European market, you can see the power of the shared value. What I'm showing you on the left-hand side is a particular model point of our portfolio of term assurance, what Vitality AI does to the VRNB, to the value to the insurer. On the right-hand side, what the value is to the member. What you see is in the black, kind of a standard policy is a certain value of new business, a certain actual value. When you roll out the Vitality AI, you get different levels of engagement.
The fundamental hypothesis is getting people engaged drives better behavior, and all the value factors, selection, pricing, claims, selective lapse all improve. You can see from that waterfall that from our projections, we can increase the value by 48% to nearly 80% depending on levels of engagement. By personalizing and getting more people engaged, the value to customers is quite remarkable. On the right-hand side, you can see the value to member. If you're not engaged at all, you pay slightly more, which is correct from a shared value perspective. If you engage slightly or get to platinum, you get massive value, nearly 12x a year's premium in values, and you live longer. I think that's a proposition that is so different to the standard life insurance proposition. Life insurance is inefficient.
This makes it more efficient, and you can see the economic value being shared between the insurer and the member. A lot of work taking place in Vitality Network. We remain optimistic. Watch our launch in November, and hopefully in February, March, we'll have a lot to tell you about the traction we're achieving. Let me end on Ping An Health. I made the point of robust performance. The profit of Ping An Health growing 22% to CNY 2.5 billion. Our growth after expenses up 10%. We had a once-off tax benefit in the previous years, so it kind of boosted the previous year's base, 10% up. You can see the tremendous levels of new business, and you can see the scale of the business. 32 million lives paying massive amounts of premium, nearly CNY 18 billion of premium.
This is a very, very large health insurance business that's been built from the start. Our analysis shows clearly that private health insurance in China is likely to grow strongly. The analysis shows that when you look at things like innovative drug coverage, projections are that very quickly private health insurance will really start to move in and cover the out-of-pocket exposure that social health insurance simply can't. The growth is likely to be very strong. You can see Ping An Health really is leading the pack. Our market share has climbed from 6% to nearly 10%, and our margin is higher on the third panel than our competitors. The margin is dramatically different. The quality of the business is quite tremendous. The balance sheet strength and the cash generation, the balance sheet now is close to CNY 12 billion, 330% solvency level.
It's paying out considerable dividends, a declared dividend now of nearly CNY 700 million, a quarter which flows to Discovery. A tremendous, tremendous success story and an exceptional business. I will point out one cross-functional observation: Ping An Health to Vitality Health to Discovery Health, three of our health insurance businesses in different markets, all performing exceptionally well. I think that talks to the efficacy of the technology, the model, and what we do with our partners in different ways. Really illustrating the group's health insurance capabilities in different markets, completely different territories in a way. To end off on the global stuff, we're doing a similar kind of focus around an organizing principle around Vitality AI, all of this complexity manifesting regionally on the face of the mobile. Let me end and just tell you again that the group has performed robustly around a 30% level in a complex environment.
It's been an excellent start to our five-year growth corridor, pivoting on 15%- 20% growth, a very strong conviction we can grow, but at the same time, generate cash, pay dividends, have a superior ROE. Do all of it from the basis of the model. The model itself is likely to be more relevant, unique data, unique capabilities, and I hope I've demonstrated how that may play out. Regardless of the complexity and scale of our businesses, to our customers, we'll appear simply on the face of the bank or the face of the mobile. The fourth point, our business is now focused in two composites with two growth targets. I think very, very well focused. Our global business now really restructured and focused, and the next year will be very important to illustrate how we scale that further. That's it from me. It's been a great year.
There's a lot of questions, and our team and our executive team is online should you want to ask questions. I want to just end by thanking our Discovery people again. They've done a remarkable, remarkable job, and just we are very grateful to them. Thanks to you guys. Let me hand to David Danilowitz to chair, Dave, this section.
Great, Adrian, thank you very much. I'm going to move over to the Q&A. First question comes from Barron from JP Morgan. I'll pass this over to Deon. The question is, why is it still not a good time to capture or value the bank and Ping An Health in full within the embedded value, using more forward-looking valuation methodologies rather than capturing them at NAV?
Thank you, David, and thank you for the question, Barron. Your observation is absolutely correct in that a very large component of the group's value now resides in businesses that are not covered through the EV. It would certainly make a lot of sense, and I think will be useful for the market to publish something like a group equity value. We've been doing considerable work internally on that, and we obviously do those valuations internally. Some of those are supported by independent valuations, but the fact remains that for those, especially those new growing businesses, a large component of that value still sits in the terminal part of the valuation. While we are growing in our confidence, given the track record in those long-term assumptions, they are very sensitive to those, or the valuations are very sensitive to those long-term assumptions. We are continuing with that process.
In the meantime, what we have done, and hopefully that will help yourselves to form some opinion on these valuations, is to provide as much as possible from a disclosure perspective as to the various drivers of the businesses in the meantime. Once we get to a level of comfort in terms of both the track record and the stability of those long-term assumptions, and also obviously very sensitive to economic assumptions, growth, terminal growth rates, discount rates, et cetera, we understand that issue. We are as keen to actually get that out in the public domain, but it may take a while still.
Great, thanks, Deon. I'm going to move over to Riaan. There's a few questions around Discovery Life. The first question comes from Mark Christellis. Riaan, the question is, the SA Life CSM analysis has shown multiple large negative assumption changes for three years since IFRS 17 implementation. What comfort can you give us that this year's write-down, this year's ZAR -3 billion , is unlikely to repeat again going forward? I would add, it's a very similar question coming from Faisal from HSBC, which you can answer, I think, together.
Right, thank you. I think there's a number of things that we probably just need to look at together. From an IFRS 17 point of view, we should consider movements in the contractual services more than the risk adjustment and the other comprehensive income, RCI, components together.
If you look at the movement of those components together over the past year, that's actually grown by ZAR 900 million or 4% to about ZAR 23.3 billion over the period. I think linked to that, just considering the movements in the embedded value and specifically the experience variance is another measure of value, which directly talks to the issues. Discovery Life had positive experience variances in total over this period, and that was over ZAR 697 million of methodology assumption changes over this period, leading to a growth of about 13.7% or return on over the EV. Just unpacking that maybe one level deeper to specific questions around CSM, I think it reflects in experience variances as well. You've got a dynamic of strongly positive experience variances driven by claims, by negative variances in particular from policy alterations. Now, variance that manifests almost...
Considering the relation, we do have a phasing in structural initiatives. Many of them will start having an impact to really address negative variance of policy alterations in isolation. You've also got the further, as we saw in this period, of experience items and largely offsetting that. Hopefully, that answers some of those questions around just the total variances as well as the impact of CSM.
Great. Thanks, Riaan. The line cut in briefly. We're going to move back to you, actually. If the line isn't clear, we'll come back to you afterwards. I'll let you know. You won't know yourself. As a follow-up question from Faison, as well as a question from James Shook from Citigroup, the questions relate to the mortality and morbidity experience. I'll read it from James, but it's aligned with Faison's question. To what extent is the ZAR 580 million of positive claims experience one-off in nature? Will this not repeat next year? I'll add, as a combined question, he asked, can you explain the year-on-year change in the insurance service result and the things to consider for using this as a base for next year?
Sure. I think the two questions actually talk to the same component, being a very good claims experience over the past financial year. The good claims experience also impacts on the insurance service result. To the extent how we think about...
Thanks, Riaan. We're going to cut out another question. It was a bit jumpy. We'll come back to you in a bit. Adrian, I'll move over to you. A question from Radebe from Emergency Investment Managers. It's a long question. I'll read it out. Good morning. Discovery has pioneered a lot of innovative thinking within insurance and the shared value model that it has exported globally. However, in terms of transformation within senior executives and business unit heads, Discovery is behind the curve. What is management doing to develop the next generation of Black leaders similar to how Hylton Kallner was mentored by Adrian and given opportunities to gain skill and experience to be able to lead Discovery globally into the future?
David, thanks. Let me be clear that we are firmly committed to transformation. We have exceptional people throughout the group making the way up, exceptional talented Black leadership. You will see that through the various executive committees and the quality of people coming through, the ability to mentor them to the point is very, very strong. The bench forming is very strong. You'll see that playing out over time. We are committed to it and give it some time to come through. The amount of talent and how that's playing through is remarkably strong. Can say more, David, but it's a very good question.
Thanks, Adrian. There's a question from Tej from White Oak Capital over to Hylton. The question is on Discovery Bank. Why are the number of Discovery Bank clients at 1.2 million and accounts at 3 million, respectively? Does this mean on average everyone has two and a half accounts? Why would they need more than one account? Any clarification would be greatly appreciated. Hylton, we'll move over to you with a separate, but another question on Bank from Harry Burta from Bank of America Securities. What is the potential for Discovery Bank's home loan book over the next five years? Are you considering launching any new banking products in 2026? Can you comment on the negative apologies? Those are the two questions.
Thanks for the question. It's pretty simple in that our clients in the bank have multiple accounts with us. They often have a savings account in addition to basic accounts offered by bankers and so on. The reflect of... We see that shown in the present tends to increase the... Hopefully that... A very long... We haven't disclosed any per August. We're very pleased with the growth to our book, growing very strongly. Quality and how we think about the... Scale of home loans in South Africa, it obviously has a lot of runway that we're going to... Any forecasts.
Great. I'm going to move over to the U.K. A question from Faison from HSBC. I'm going to pass over to Emile. For Vitality Health, what is the outlook for inflation? What is your expectation or need for further rate increases to meet your margin target?
Faison, it's probably COVID of significant changes in how people use PMI because of all of the pressures in the NHS. It has driven inflation for a number of years. What we see now is some uncertainty in that. We can see from our data that the patterns in which people use and the way in which people use their private medical insurance, as a result of that, we have already started to moderate our increase. In short, your answer is yes, we see more stability in inflation. We are moderating back to with the tension experience as well. Thank you.
Thanks, Emile. We're going to pause just for a minute to clarify. I think there's some jumpy responses coming through, and then we'll continue with the Q&A shortly. Thank you.
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We are very sorry. We've had this technical problem, as I think you probably know. If you're still on, we cannot fix it, it appears. What we are proposing, what we will do is shut it now and answer each of these questions thoroughly and fully on our website with, I think, the presentation deal that we will make available. Very sorry for this. We really like and enjoy and believe it. We must answer questions thoroughly and rigorously. Watch online for them. Sorry for this, and thank you very much for the time again. It's been a great year and grateful for your support and interest. Thank you.