Other parts of this series:
Life insurers that embrace connected wellness can shift from being institutions remote from their policyholders to become highly relevant “everyday insurers.”
Connected wellness offers life insurers more than just an opportunity to strengthen ties with their customers. It can help them transform their businesses so they can take advantage of the myriad of opportunities emerging in the digital economy.
Life insurance providers that embrace connected wellness will be able to shift from being remote institutions that policyholders rarely contact. Instead, they can become highly relevant “everyday insurers” that are intimately and positively involved in the daily lives of their customers. Such insurers use personal data submitted by customers to encourage policyholders to modify their behavior and thereby lead healthier and safer lifestyles. This, as I mentioned in my previous blog post, can extend customers’ lives and reduce claims costs substantially. The huge volumes of real-time customer data generated by connected wellness services also allow insurers to improve their risk assessment and pricing.
Our research shows that consumers around the world are keen to sign up for connected wellness services. We found that 44 percent are likely to consider connected insurance services that encourage them be healthy. What’s more, 78 percent are interested in insurers helping them, or their aged relatives, live safely in their homes. Millennials and seniors are key target markets for connected wellness offerings. Around 65 percent of millennials globally would consider a connected life insurance product. In the US, 53 percent of people 65 years or older use health technology connected to digital devices at least once a month.
By deploying connected wellness solutions, and becoming “everyday insurers”, life insurance providers can change fundamentally how they function. This transformation will be most evident in three key areas of their businesses.
Relationships: Increased, and more intense, customer interactions will enable life insurers to generate additional value by improving risk management, refining the risk assessment of new customers, and gaining greater insight into the behavior and needs of policyholders.
Markets: Connected wellness will enable life insurers to capitalize on new markets, engage more frequently with underserved customers and, by improving underwriting, capture a larger share of consumers’ insurance spending.
Ecosystems: Life insurers that plan to deliver connected wellness services don’t have to limit themselves to a single digital ecosystem. Nor do they need to build their own ecosystem. By developing an open business architecture, they can opt to orchestrate their own ecosystem or participate in other connected wellness ecosystems.
Vitality, a wellness program founded by insurance firm Discovery in South Africa, is a great example of a successful connected wellness strategy. It combines strong analytics and a network of partners to provide customers with an array of benefits that build enticing and enduring relationships. Vitality reckons its members have around 30 percent lower hospital costs than other life insurance customers. It’s a model so attractive to both insurers and their customers that its key components (Shown below) are now licensed and deployed across the world in partnership with local insurance providers such as Generali, John Hancock, Manulife, AIA and Ping An.
In my next blog post, I’ll discuss some of the other organizations that are rolling out connected wellness services to their customers. Until then, take a look at some of these links. They contain plenty of useful insights.