Product Solutions
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  • January 2022
  • 5 minutes

4 Key Considerations for Insurance-Linked Wellness Program Success

  • Peter Rodes
  • Todd Seabaugh
  • Julianne Callaway
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In Brief

Insurance-linked wellness programs, which for years have shown more promise than sustainable results, now appear poised for widespread implementation and impact. In working with clients around the world, RGA has developed wellness-related insights in four key areas – mortality and morbidity impact, product innovation, behavioral science, and holistic well-being – to anticipate where the industry may be headed.

Made with the best of intentions, these January promises often go unfulfilled as weeks and months pass, and familiar routines settle in.

For life and health insurers, the process of creating insurance-linked wellness programs followed a similar pattern for years: well-intentioned projects yielded limited long-term results. The COVID-19 pandemic experience may be changing that. Just as the pandemic has motivated people to focus more on health and wellness, so has it subsequently spurred insurers to develop solutions that incentivize healthy behavior. In an RGA/RGAX survey of 107 life and health insurers:

  • 85% reported wellness as a top or moderate priority
  • 70% were creating insurance-linked wellness products
  • 57% currently offer wellness programs

As a reinsurer, RGA benefits from a comprehensive view of the industry. In working with insurer clients, we have learned about their struggles, challenges, and ambitions to engage customers through wellness programs and to help policyholders lead healthier lives. Since the New Year is also a time of reflection, we have collected some of the resulting wellness-related insights RGA published in the past year in four key areas and present those here along with considerations of where the industry may be headed.

Mortality and Morbidity Impact

A growing body of research demonstrates how healthy lifestyle behaviors – as measured through data from wearables and other sources – can materially improve mortality and morbidity outcomes. It’s time for insurers to take notice. The industry must develop better understanding of lifestyle factors and their impact on health and longevity to move beyond the theoretical potential of wellness in insurance and create practical solutions that produce tangible results. Insurers and reinsurers need to partner with insurtechs to create tools that effectively capture wellness data and then apply underwriting and data analytics expertise to create new models for risk assessment. More immediately, the industry must look closely as lifestyle drivers of mortality in the wake of COVID-19.

Learn more from RGA’s subject matter experts:

Product Innovation

Traditionally, consumers’ interactions with their life insurers were limited to two touchpoints: buying a policy and making a claim. That is why insurance-linked wellness programs offer such exciting potential to engage consumers more consistently. Success starts with demonstrating value, both for the policyholder and the insurer.

The central benefits for the policyholders are, of course, better health, longer lives, and greater well-being as they age. Incentivizing healthy behavior may include additional benefits, such as discounts, reimbursements, and technology-enabled health tracking and support – all while protecting data privacy. For insurers, integrating wellness into products can facilitate upselling, data collection for risk assessment, and in-force optimization through better policyholder health, among other advantages. Ultimately, all benefits flow from creating greater customer engagement and building relationships that are deeper than just single transactions.

Learn more from RGA’s subject matter experts:

Behavioral Science

No wellness program can succeed without policyholder commitment. Wellness is not a one-time event, after all; it is a way of life. The good news is that insurance provides a unique ability to offer financial incentives to promote behavior change. The central question: How can insurers most effectively encourage healthy behaviors that have a material impact on risk assessment and pricing? Behavioral science holds the key. Consumers want increased engagement and participation in decision-making, and insurance-linked wellness programs can respond to this by enabling and encouraging policyholders to take control and change their lifestyles.

Again, the impact of COVID-19 must be considered. How has the pandemic affected trust, priorities, and behavior? What opportunities are there to leverage an increased interest in wellness alongside a growing familiarity with digital tools that promote healthy living? The more insurers meet consumers where they are, the more likely engagement in wellness programs is likely to succeed.

Learn more from RGA’s subject matter experts:

Holistic Well-Being

Wellness is about more than how many steps a person takes each day. It’s time to reimagine insurance-linked wellness programs and adopt a holistic approach that considers multiple factors – mental, emotional, social, financial – combined with physical markers of good health. The concept of wellness has evolved to make mental health a stronger area of focus, and the life-altering disruptions of the pandemic only accelerated this. Insurers need to account for mental health in future insurance offerings. Additional wellness-related areas to consider include disease management, genetics-based wellness, healthy aging, and financial wellness. The insurance industry has meaningful role to play in promoting overall well-being – for the good of our businesses as well as that of our policyholders.

Learn more from RGA’s subject matter experts:

Conclusion: Collaboration

Insurance is an analytical business often focused on solving problems with clear, logical answers. Unfortunately, wellness is based on human behavior, and human behavior is often far from logical. The central challenge with establishing successful insurance-linked wellness programs stems from trying to capture and quantify behavior in a way that allows for meaningful risk analysis. This goes beyond traditional insurance skill sets. It requires capitalizing on the skills of those from a range of disciplines inside and outside the industry: underwriters, actuaries, medical professionals, product developers, data scientists, technology experts, behavioral scientists, marketers, and more. 
Such collaboration should incorporate health providers and consumer data to create more frequent, relevant, and engaging experiences that can deliver on the promise of wellness.

Our most successful wellness initiatives at RGA have all relied on strong partnerships with our clients and with wellness-related service providers to create comprehensive solutions. We are eager to deliver additional wellness solutions with our partners in 2022.

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Meet the Authors & Experts

Peter Rodes
Vice President, Consumer Engagement (former)
Todd Seabaugh
Vice President, Innovation Initiative Lead, RGAX Lean Accelerator
Julianne Callaway
Julianne Callaway
Vice President and Senior Actuary, Strategic Research, Global Actuarial Pricing and Research