Are Health Engagement Programs Worth It?

Do the benefits of engaging with customers on health and wellness outweigh the costs of launching and running the program? 

Person running on a treadmill

It seems obvious: Increasing customer health and wellness is a good thing for life insurers. Improved policyholder longevity equals fewer claims, right? Not so fast.  

Insurers are quick to realize that just because something may help people live longer doesn't necessarily mean that it's a good investment. What about the costs involved? 

That's the question many are facing when it comes to health and wellness engagement programs. Do the benefits of engaging with customers on health and wellness outweigh the costs of launching and running the program? 

As a global reinsurer, we've had many conversations with leading life insurers that recognize the potential value of health and wellness engagement programs but still question whether they can generate a positive return on investment. After all, the costs of such programs clearly add up: buying or building the platform, paying for attractive rewards to keep customers engaged, training distribution and educating customers on how the program works – the list goes on.

That's why we decided to put the business model to the test. Our actuarial teams looked at various health and wellness engagement programs globally and developed our own set of assumptions to feed into a cost-benefit analysis. 

The result? U.S. insurers that run successful health and wellness engagement programs on a fully underwritten life product may see an aggregate mortality and lapse experience reduction of up to 3% to 4% and achieve a positive ROI. In short, it's worth it. 

Health and wellness engagement programs have the potential to create a trifecta of shared value: Policyholders lead longer, healthier lives and have access to more attractive products; insurers and reinsurers can improve their mortality and lapse experience and sustain a positive ROI; and society as a whole benefits when people are healthier and better financially protected. 

So how can you help your health and wellness engagement program succeed?

Maximize take-up and engagement rates

The percentage of policyholders who sign up and regularly participate in the health and wellness engagement program will dramatically affect the program's ROI. Life insurers should aim for at least 10% (and ideally at least 25%) of users to engage with the program on a regular basis.

To achieve these seemingly high engagement rates, insurers should have a clear target customer base, a plan for reaching those customers and a compelling program design that will keep people coming back day after day. Distributors need to be able to convey the benefits of the program; the sign-up process should be seamless; and the program should include relevant goals and challenges and provide the opportunity for users to connect with family or a wider community of users. 

See also: How Digital Health, Insurtech Are Adapting

Focus on achieving meaningful behavior changes

To help customers live healthier and live longer, the health and wellness program needs to encourage healthy lifestyle habits and sustained behavior change. This requires not just financial incentives and rewards for meeting certain fitness thresholds but also a deep understanding of the customer base and what truly motivates them. 

Behavior science shows that to create lasting change, it's best to focus your efforts on helping policyholders make small lifestyle changes. For example, rather than running a 5K once a year, get someone who sits on the couch after dinner to instead take a regular evening walk around the block.

Look for ways to grow with new and existing customers

With the growing acceptance of health apps and wearables, consumers are willing to share their data if they see the value in doing so. Based on our recent global study, we found two-thirds of consumers are open to sharing personal data or health results in return for a benefit (e.g., personalized health advice, faster application process, discounts). This presents an opportunity for insurers to offer consumers more relevant products at the right price point. 

The bottom line

It's no secret the life insurance industry is evolving fast. The modern consumer demands greater personalization, and seemingly every day insurers are presented with an opportunity for innovation. 

While certainly not every new opportunity is worth pursuing, insurers would be wise to consider implementing a health and wellness engagement program for their policyholders. With the right design, such programs can generate significant value for insurers and insureds, making them a very worthwhile investment.

Heather Majewski

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Heather Majewski

As head of Americas Life & Health Solutions for Swiss Re, Heather Majewski and her team are focused on driving growth, operational efficiency and improved performance in the insurance industry. Her team is responsible for the origination, development and commercialization of client-focused solutions. The solutions leverage technology platforms, strategic partnerships and Swiss Re expertise in risk management, product development, pricing, underwriting, behavioral economics and data science.

Majewski has more than 20 years of experience in the insurance industry in multiple product lines. Before joining Swiss Re, she was head of wellness innovation for John Hancock Insurance, where she was instrumental in the development and launch of the John Hancock Vitality insurance solution that rewards people for making healthy choices. She was also focused on the long-term care industry and improving profitability through product design and health engagement. Prior to that, Majewski held various strategic and actuarial roles at The Hartford in the individual annuity and employer benefits space.

Majewski is a fellow of the Society of Actuaries with a BS in actuarial science and an MS in mathematics from the University of Connecticut.

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