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Step by step, the insurance industry is changing

Taking strides to modernize insurance.

Many small steps can lead to very big change. This observation may seem like a cliché. But when it comes to health and physical activity, it’s true in the most literal sense, and the insurance industry is paying attention. After all, physical activity, including walking step by step, is crucial to Canadians’ health, well-being and quality of life. 

Active people generally live longer, healthier lives. They are more productive and more likely to avoid illness and injury.1 By contrast, sedentary behaviour is associated with higher mortality rates.2 And when it comes to serious illness, physical activity can help lessen certain side effects of treatments, such as fatigue and depression, as well as reducing risk of recurrence3 and helping recovery.4

Whatever way you look at it, every step counts. We’re not talking about Olympic-level athleticism and training, either. A little bit of activity can make a world of difference. “They say sitting is the new smoking,” says Karen Cutler, Vice President and Chief Underwriter at Manulife. “Just get up and move – whether it be laps around the office floor between meetings, or parking further away from your destination. You can be overweight and still see the benefits of increasing activity. It doesn’t have to be 10,000 steps a day, that’s a fallacy. You get massive benefits by simply moving a little bit more.”

Key findings from Munich Re study:

  • Physical activity as measured by steps per day effectively stratifies mortality risk.
  • Steps per day is an important predictor of mortality risk, and may be especially effective in identifying high mortality risk for sedentary behavior.
  • Steps per day provides additional segmentation of mortality even after considering traditional underwriting attributes, such as smoking status, body mass index (BMI), cholesterol, blood pressure and health history of diabetes, cardiovascular disease and cancer.

Source: https://www.munichre.com/site/marclife-mobile/get/documents_E-889788279/marclife/assset.marclife/Documents/Publications/Stratifying_Risk_Using_Wearable_Data.pdf

New perspective on activity and risk

Research shows that the number of steps walked per day, as measured by wearable sensors, is a powerful predictor of mortality. Earlier this year, Munich Re published a white paper discussing how physical activity effectively stratified the mortality risk profile of a U.S. population-based dataset. Munich Re’s analysis found that steps per day can effectively segment mortality risk even after controlling for age, gender, smoking status and various health indicators.5

Wearable technology can track metrics associated with physical activity: step count, speed and minutes of moderate and vigorous activity. Some models also capture heart rate, sleep patterns and calories burned. Roughly half of Americans own a wearable device,6 and one in five Canadians age 35 to 49 own at least one wearable device.7 Consequently, the insurance industry is interested in investigating the data that could be analyzed on a large scale from these devices. 

Physical activity (according to the Public Health Agency of Canada):

  • promotes healthy growth and development 
  • helps prevent chronic diseases like cancer, Type 2 diabetes and heart disease
  • increases strength
  • increases energy
  • decreases stress
  • prolongs independence as we get older

Manulife has collaborated with Vivametrica, which provided the dataset for the Munich Re study, to explore further. A pilot study has compared the traditional underwriting process with Vivametrica’s health-assessment process, which marries data from wearables with a few simple health questions. Analyses of the comparison is currently underway. Depending on the outcome, there may be an opportunity to streamline underwriting and further improve the application process for clients. 

“We’re investigating exercise and what that means for people applying for insurance,” explains Cutler. “We will conduct further research on how activity affects longevity and recovery from disease. We expect to be able to segment risk based on how active people are.”

Manulife Vitality® program, a wearable success story 

Already well-versed in how wearables can help provide engaging, shared-value insurance to customers, Manulife offers the innovative healthy-living rewards program Manulife Vitality. The program continues to expand with more partnerships and rewards aimed to encourage customers towards healthy behaviours. Apple Watch is an example of a wearable device that enables customers to participate in the program and track their physical activity. 

The Manulife Vitality program is currently available on all Family Term™ coverage options. As members work to improve their health, they can earn Vitality Points™ and enjoy rewards along the way. The more Vitality Points they earn, the higher their Vitality Status™, and the greater their potential rewards and savings. “The program creates value because we’re helping our customers make healthy choices that could help them live longer. That’s good from a life insurance perspective, but it also allows us to have a richer conversation and deeper relationship with our customers,” explains Blake Hill, Assistant Vice-President and Head of the Manulife Vitality program.

“Success of the Manulife Vitality program can be measured in a number of ways,” says Hill. “First is the extent customers are engaging in the program. Members are participating in a number of activities and this continues to grow.” Canadians have some of the highest engagement rates seen when compared to people participating in other Vitality programs around the world. “A second measure of success is the wide spectrum of customers who are participating: young and not so young, healthy individuals and those who have health risk factors.” 

A third measure of success involves the results of the net promoter score (NPS) from clients participating in the program. An NPS is a metric used to gauge the loyalty of consumers in terms of how likely they are to endorse a product to another person. “Customers are very happy with the product they’ve bought, and they are happy with the advisor who recommended it,” says Hill.

Manulife Vitality® stats:

  • 339,533 verified workouts since launch in September, 2016
  • 79% of members have completed an activity
  • 9.8 – average number of monthly activities logged per member
  • Breakdown of members: male = 54%, female = 46%

As of February 27, 2018.

He continues, “Another way to look at the success of the program is around how many advisors have understood the benefit of what we’re trying to do with shared-value insurance. Meaning that when we partner with our clients to help them live healthier lives, it creates value – not just for the member through discounts and rewards, but for the advisors because they have the opportunity to build more meaningful relationships with their clients through increased interactions and interesting discussions about the program. They are even able to attract different types of new customers.” 

Always improving

It may take time to introduce a new approach in the marketplace, and it may take time for people to fully experience the benefits of shared-value insurance. Educating customers is part of the journey. Eventually the program will expand to other products beyond Family Term with Vitality™ to reach clients with different insurance needs. More fine-tuning of the program is also planned in order to further personalize rewards and incentives. The ultimate goal is to help people find motivation to change. A small step in the right direction can lead to a lifelong journey towards healthier living.

Vivametrica, is an Insurtech company started in 2013, that provides measurement of mortality and chronic disease risk using digital biomarkers developed from personal sensor data.

Source: https://www.munichre.com/site/marclife-mobile/get/documents_E-889788279/marclife/assset.marclife/Documents/Publications/Stratifying_Risk_Using_Wearable_Data.pdf

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