Tech Offering Helps Life Insurers Create Vitality Product Rival - May 8, 2017

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By Jay Cooper May 8, 2017

A partnership between two tech companies could allow life insurers to develop health engagement platforms that could rival John Hancock’s Vitality program, the popular life insurance product that offers consumers savings and rewards for healthy lifestyle choices. Swiss company dacadoo AG, which is making a bigger foray into the U.S. life and health insurance markets, already offers a global digital health engagement platform. That platform offers a health score between one to 1,000 for consumers, based on more than 100 data points. Now the company is teaming with Loylogic, a company that designs e-commerce solutions for loyalty programs across different industries. Through the combined offering, a life insurer can create a customizable rewards program, with its own branding. Life insurers can choose types of rewards or points to assign for different lifestyle choices, such as a certain type of exercise, better sleep habits, or healthier eating choices. The rewards program can encourage better habits and potentially increased longevity for life insurance consumers, but the benefits of customer engagement should not be overlooked, says Peter Ohnemus, president and CEO of dacadoo. “I’m a client of a life insurer who I’ve never met and who has no idea who I am,” Ohnemus says. The rewards program creates a positive feedback loop with the insurance company, he explains. “It becomes a different relationship with the life insurance company and its customer.”

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The underlying risk models that help determine a consumer’s health score on dacadoo can also be used to help underwrite the customer’s life insurance policy, explains Andre Naef, chief technology officer at dacadoo. “The health score is how we talk about it to the consumer,” he says. Life insurers choosing to do so could lower the cost of customers’ policies as they make lifestyle choices that improve their health score, Naef says. The offering from dacadoo and Loylogic comes on the heels of a successful health engagement program launched as part of John Hancock's Vitality product in 2015. That program provides savings and rewards to qualifying policyholders who complete various health-related activities such as exercising, getting an annual health screening or receiving a flu shot. Customers can track their physical activity for the program with smartphone apps and devices like the Apple Watch and Fitbit. In April 2016, John Hancock expanded its program with the addition of a HealthyFood program, which rewards healthy food choices with discounts, cash back of up to $600 a year on grocery bills and program points that lead to as much as 15% savings on annual premiums. In a press release at the time of the HealthyFood program launch, John Hancock executives claimed the program was indeed positively impacting customers’ lifestyle choices. The company also claimed that policyholders took an average of 9,205 steps a day, compared to the 5,900 steps taken by the average U.S. adult. converted by W eb2PDFConvert.com


Perhaps more important, the Vitality program is having a positive effect on John Hancock's bottom line. John Hancock Life sales in the first quarter were up 8% from the first quarter of 2016, John Hancock's parent company, Manulife, noted in a news release about its earnings. More encouraging, the company noted that term sales increased 74% from the first quarter of 2016, “with momentum driven by an expanded distribution reach and the growing popularity of the Vitality feature.�

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