Sept. 5 (Bloomberg) -- Discovery Holdings Ltd., the owner of South Africa’s largest medical-insurance administrator, fell the most in more than two-and-a-half years after saying life policies may be held for less time than previously expected.
“The current economic environment may mean policy-holders will hold their life policies for shorter periods than initially envisaged,” Chief Executive Officer Adrian Gore said in a results presentation in Johannesburg today.
Discovery Holdings shares dropped 3 percent, the biggest decline since December 2009, to 56.20 rand at the 5 p.m. close of trading in Johannesburg, where the company is based.
Net income for the year through June fell 15 percent to 2.2 billion rand ($263 million), the company said in a statement today. That compared with the 2.4 billion-rand average estimate of four analysts surveyed by Bloomberg.
“The market might be worried about the Discovery life business and potential policy lapses going forward,” Harry Botha, an analyst at Avior Research in Johannesburg, said by telephone. “Discovery changed its assumptions and said policy holders might hold on to their policies for shorter periods than initially envisaged.”
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