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Analyst Interview: Insurance Company Profile: Vitality

General Insurance Intern Ayaz Mohamedali has been working on our “Insurance Company Profile: Vitality” report. Here, we ask him about Vitality, its rewards program, and the benefits to insurers of using wearable technology.

What makes Vitality different to other health and life insurers?

Vitality offers a rewards program that rewards policy holders for living a healthy lifestyle.   Vitality points are earned by undergoing health checks and tracking physical activity through a wearable device. Vitality points can be exchanged for rewards such as cinema tickets and Starbucks drinks. One of Vitality’s most exciting reward partnerships is with Apple Watch. Customers can obtain an Apple Watch Series 2 or an Apple Watch Nike+ for an initial payment of £69, followed by monthly payments that are dependent on activity level.

Vitality spent over £2m in advertising between 2015 and 2016, with a large portion of this expenditure being spent on its Everyday Athlete campaign. The campaign aims to inspire physical activity by encouraging people to make small changes to their everyday behavior. Moreover, boasting hugely successful athletes as brand ambassadors, such as Olympic Gold medalist Jessica-Ennis, Vitality is pushing to be recognized as a company that supports and encourages a healthy, active lifestyle rather than being a mere insurance provider.

What are the benefits to Vitality of running a rewards scheme?

Vitality incentivizes policy holders to be active through its rewards program. Consequently it has developed a customer base of active individuals who inevitably have a lower risk of claiming. The real-time data obtained through tracking a user’s physical activity has allowed Vitality to develop dynamic pricing models that offer premium discounts based on activity levels.

Further, the rewards program has allowed Vitality to forge various commercial partnerships with leading global brands such as Starbucks and British Airways. Not only does the scheme encourage policy holders to engage with partner brands, it allows Vitality to engage with its own customers regularly, not just at purchase or claim.

What does the future hold for wearable technology in the insurance industry?

Wearable technology is a huge growth industry, with many technology companies looking to develop wearables that can measure different types of medical data. For instance, many companies are looking to develop non-invasive wearables that can measure a user’s blood sugar level. This will allow insurance firms to monitor what a user has eaten, providing superior data to assess the health and lifestyle of a policy holder. With the development of such technology it would be unsurprising to see dynamic pricing models being used by insurers that offer discounts for healthy eating, as well as physical activity.

By Ayaz Mohamedali, General Insurance Intern

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