Q: What is the true value of wellness programmes, and why should they be aligned to medical aids?
A: The insurance industry has a unique role to play in building more resilient communities – a pressing need in the midst of the current global coronavirus crisis.

There are four lifestyle choices that lead to 60% of mortality risk and 80% of morbidity risk, namely smoking, poor nutrition, physical inactivity and excessive alcohol consumption. Yet traditional insurance models are based on the assumption of pre-existing risk, with underwriting and prices determined at the outset of the policy and premiums kept static throughout its lifetime.

This model discounts the fact that underlying risk changes over the term of the contract as people make controllable lifestyle choices. As traditional models pool controllable risks, policy price and the amount of risk diverge as policyholders become less healthy over time.

Our Vitality programme takes this into account and is different in that its shared-value model focuses on improving behaviours such as physical activity and healthy eating that decrease disease risk.

It incentivises healthier behaviours and links this to the price of insurance. In the process, value is created and shared between the insurer (better profits, lower claims), client (improved health and increased value) and society (a healthier, more productive population).

This turns the insurance model on its head, becoming a driver of health and putting money back in people’s pockets.

Q: How do wellness programmes encourage healthier lifestyles and set benchmarks?
A: Research has found that people are better able to maintain healthy habits if they are regularly rewarded in tangible ways for smaller, short-term goals, rather than promised a bigger but less tangible reward for a long-term goal, even if this is their own good health.

We believe programmes that seek to improve well-being must help members change the behaviours that most influence the risks to their health through a personalised approach. For instance, our members can earn Discovery Miles for reaching weekly personalised fitness goals, driving and spending goals, and access rewards for doing so.

Another way is to promote static and dynamic goals so that the personalised exercise goal will gradually start to adjust based on an individual’s exercise activity – a ‘nudge’, if you like, to do a little more each week until optimal levels are reached. This equates to approximately 30 minutes of exercise five times a week, and is proven to bolster health outcomes.

In the case of Vitality, to help members achieve their Vitality Active Rewards goals safely during the Covid-19 lockdown, we made a number of changes to members’ goals, including completely digitising so the programme can be used safely at home. These goals continue to be adjusted in line with the easing of restrictions by government.

Q: How comprehensive should wellness programmes be and what do they entail?
A: Any provider of a wellness programme should undertake a holistic evaluation of its members’ health, empowering them with the information and tools (including incentives) to improve their health.

‘Healthy nudges’ to encourage good behaviour should be driven across several pillars. For Vitality, these are physical activity; nutrition; health screening; and mental well-being. These are in line with combating the risks that cause major diseases, such as diabetes, cancer and heart disease – those being physical inactivity, an unhealthy diet, smoking and excessive use of alcohol.

In order to minimise the negative impact of these risks, a programme should not only reward members for exercising more but also incentivise them to eat healthier. For example, we offer discounts on HealthyFood acquired in stores or ordered from restaurants and via Uber Eats.

Being aware of one’s health risks is critical to being able to make necessary changes, which is why an annual health check is so important. Vitality Health Check, for example, is a simple and convenient set of the most-needed health screening and preventive tests, which check blood pressure and glucose, cholesterol and weight. It also includes a non-smoker’s declaration.

During COVID-19 we’ve made it possible to complete this via a telephonic or online consultation with a wellness specialist comprehensively enough to cover the same information as would be the case with an in-person Vitality Health check-in.

Q: What are the motivations for joining, including those benefits outside of health well-being?
A: The rewards for engagement are part of a broader incentive structure that encourages positive change. Changing behaviour creates an actuarial surplus in the business, which is shared with clients through insurance savings and other benefits to motivate further and ongoing engagement in health-promoting activities.

This true Vitality member story illustrates a few of the benefits a single member can accrue. A retired businessman (65) embraces  his Vitality programme, as he would a business, by maintaining his diamond Vitality status through his fitness routine, which then unlocks rewards. He uses the travel benefit (up to 75%) to visit his children in New Zealand and takes local flights two or three times a year.

He uses his HealthyFood, HealthyGear and HealthyCare benefits to the maximum – he has several pairs of running shoes through HealthyGear, for which he received a 75% discount at Sportsmans Warehouse. He has paid off two Apple watches via the Vitality Active Rewards goals and, during lockdown he has also made use of BoxOffice vouchers and collected some R6 000 in cash back from the various benefits.

Q: What are the financial implications of such a programme?
A: When integrated into insurance or financial products, our programme allows for the dynamic pricing of risk over time, based on a member’s day-to-day engagement in healthy behaviours. This is obviously dependent on status and integration on an individual basis but it is hugely impactful as we have revealed through Discovery Vitality, and which has been made evident from the growth of the client base across Discovery Life, Discovery Insure and Discovery Bank.

As an illustration of the breadth of the Vitality rewards, in 2019 alone, SA members enjoyed more than 1 million discounted flights, in excess of 1.5 million discounted movie tickets, 15 million HealthyFood transactions and much, much more.

Q: What expertise should underlie these programmes?
A: I obviously see the Vitality programme as a benchmark. Because it has been built up over many years, it is supported by a multi-disciplinary team consisting of clinicians, wellness practitioners, actuaries, data scientists and behavioural experts, as well as external healthcare professionals, such as accredited nurses and biokineticists.

This is a comprehensive group of highly skilled experts, and they constantly look to improve the efficacy of the programme by applying the latest developments in their field of science.

Q: Should there be various levels of goals and rewards?
A: The point is to help people achieve sustainable engagement with healthy behaviours, which is why a tiered reward structure combining short-term personalised goals and an annual status to create long-term incentives works optimally.

Vitality has status levels (blue, bronze, silver, gold and diamond) that are based on an individual’s engagement with the programme. For each healthy behaviour, such as having a health check, buying HealthyFood or being physically active, points rewarded increase their health status on the programme.

Our research has shown that the more-engaged members tend to have up to a 76% lower mortality rate, and on average live 13 to 21 years longer than the rest of the insured population. Our analysis also shows that gold-status members with heart disease have 41% lower risk claims than a member who has no Vitality membership.

Similarly, members on gold Vitality status living with diabetes or lung disease have 53% and 50% lower risk claims respectively than those with no Vitality membership.

Q: How do participants understand and use the collected information from their participation to set their own goals or influence lifestyle changes?
A: Research shows that achieving goals in any aspect of your life can trigger other positive lifestyle behaviours.

We have seen evidence of this knock-on effect in our own studies, with the data demonstrating that engaging in regular physical activity is directly linked to a higher prevalence of health screenings and, thus, rewards.

The principle of loss-aversion is key – people would rather perform the right behaviours than lose an incentive or reward that they have worked for, including status-level discounts and rewards.

A study by the RAND Corporation on the link between incentives, (for example, Vitality points earned in exchange for an Apple watch) showed that our members exercised nearly five days more in a month to avoid paying for their device.

Having access to data and sophisticated data analytics allows us to continuously learn more about the impact of incentives on health behaviour and the link between improved health behaviour, illness and health outcomes. All of this knowledge helps industry wellness programmes to adjust, on an ongoing basis, to achieve better health outcomes.

By Kerry Dimmer