Earlier this week, financial services group Discovery outlined the growth in scale and impact of its Vitality Shared-Value Insurance model. Since launching Vitality 20 years ago, Discovery has invested considerably in building a platform that serves a global network of insurers, providing access to the Vitality brand, product offerings, technological innovations, actuarial and data insights and program assets. The Global Vitality Network now operates in 16 countries across North America, Europe, pan-Asia, South Africa and the United Kingdom, serving around 10 million clients through seven insurers. As an integrated, incentive-driven insurance model, Vitality is uniquely positioned to ‘monetize’ better health and is attracting over 150,000 new members a month.
The model is based on Vitality, a scientifically validated health-promotion program that draws on behavioral economics to support, guide and incentivize people to improve their health. When integrated into insurance products, it allows for the dynamic pricing of risk over time based on people’s engagement in their health. This results in material benefits shared between the insurer, policyholders and society.
In 2016, Vitality Group — Discovery’s arm tasked with driving the global expansion of the Vitality Shared-Value Insurance model — introduced the model to six new markets.
“We have seen excellent engagement levels in Vitality in both new and established markets, with most experiencing Vitality take-up in excess of 40 percent. Engaged Vitality members continue to exhibit better health outcomes, driving and savings behavior, exhibited for instance through Vitality Active Rewards, which has dramatically increased physical activity levels globally,” said Adrian Gore, CEO of Discovery.
Vitality Active Rewards has been Discovery’s fastest-growing health promotion offering to date and is currently available in nine countries, including Singapore, South Africa, the UK, US, China, Australia and Hong Kong, with plans to roll out globally in 2018. It applies short-term incentives to encourage people to reach personalized physical activity goals in exchange for rewards with partners such as Apple and Starbucks — delivering tangible results. In partnership with Apple, Vitality offers members the chance to earn the cost of their Apple Watch by reaching regular activity goals. Those that use the app increase their exercise levels on average by 24 percent and those using Apple Watch increase their activity sustainably by an average of 81 percent.
As part of the broader expansion strategy, a partnership with Hannover Re is focused on marketing Vitality Active, a mobile-only version of Vitality Shared-Value Insurance focused primarily on Vitality Active Rewards. Vitality Active is both faster and more economical to launch, making it attractive to smaller life and health insurance markets.
Vitality Group has also invested in the development of Vitality One — a cost-effective and configurable technology framework for rolling out Vitality Shared-Value Insurance to new and existing health and life insurance markets, allowing for more rapid deployment of innovation globally.
Thus far the model has been well received in each of its markets. In the US and Canada, John Hancock Vitality-linked policies have grown significantly on both a policy count and premium basis, due to more US states approving the Vitality-integrated insurance product. The success of Vitality in the US is also a function of strong term and unit-linked offerings, increased broker adoption from immersive Vitality training programs and resonance of the Apple Watch benefit.
In Canada, Manulife expects accelerated growth and penetration with a broader set of insurance products linked with Vitality and the launch of Active Rewards with Apple Watch later this year.
During the last 12 months, AIA Vitality, the most mature Vitality Group partner market, launched stand-alone Active Rewards campaigns to market Vitality and create up-sell opportunities in Hong Kong, Malaysia, the Philippines, Singapore, Sri Lanka and Vietnam.
In Australia, Discovery recent partnered with AIA Australia and GMHBA Ltd to create a new health insurance brand called myOwn. The joint venture launched in July 2017 and offers health insurance integrated with AIA Vitality through various channels and will soon also integrated with AIA Life to create a product offering combining both health and life insurance with Vitality.
In Europe, Generali Vitality’s launch in Germany this past year resulted in high sales volumes, large policy premium sizes and good client engagement. The product is distributed via numerous channels including the tied agency channels. Deutsche Vermögensberatung, Germany’s largest independent financial adviser network, will launch Vitality in January 2018. Generali France’s corporate Vitality Shared-Value Insurance offering has also seen a significant number of corporates activating Vitality. Generali Austria Vitality will begin sales from
China’s Ping An Health has also demonstrated strong performance, with membership growing by 428 percent to 3.7 million. Its annualized new business net premium increased 103 percent to RMB 1.6 billion year-on-year, driven largely by the success of the internet product, with operating profit increasing by 66 percent in South African rand terms. As part of its strategy to reach more cities in China, Ping An Health has opened a new branch in the Chengdu region, which has a population of more than 14 million. Further provincial-level branches and several smaller branches are planned to open in 2018.
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Published Sep 20, 2017 9am EDT / 6am PDT / 2pm BST / 3pm CEST