Product Solutions
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  • September 2020
  • 5 minutes

Wellness in Insurance: A Coming of Age Story

  • Julianne Callaway
  • Diana Bosworth
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Image of longevity via cairn of stones against water
In Brief
Increased interest in and application of wellness products indicate that we may be closer than ever to realizing the potential of insurance-linked wellness programs. Insurers are presented with the opportunity to expand their engagement with consumers and serve as long-term partners in health, truly helping policyholders live longer and healthier lives.

We know that lifestyle behaviours, such as physical activity, nutrition, and smoking, can significantly contribute to health outcomes, but translating that knowledge into actionable resources and practical underwriting evidence has proven challenging. However, we are seeing increased interest in and application of wellness products across the globe, and these recent innovations suggest we may be closer than ever to realizing the potential of insurance-linked wellness programs.

See also: Lifestyle-Related Behaviors and Mortality: A Comparison of Physical Inactivity and Smoking

A new generation of products

Technology-driven products are evolving to help insurers gain greater insight not only into the behavior of consumers, but also the impact those behaviours have on individuals’ overall health and longevity. Smartphone applications and wearable devices to track and promote personal health and wellness have expanded well beyond simple step counting. Health tracking can take into account multiple lifestyle factors that impact mortality expectations and consider a more holistic view of wellness – from sleep patterns to blood sugar levels to more qualitative contributors to health.

See also: Product Trends Around the World 2Q 2020

One example is a large European insurer’s program that promotes health, well-being, and preventive care through a digital platform. Piloted among 27,000 staff members across four continents in 2019, the program marks a shift towards proactive care and features interactive prevention resources. Wellness data is gathered through on-site health screenings and via a smartphone app that promotes ongoing participant engagement by empowering employees through a range of digital health and well-being tools.

In Hong Kong, a global insurer has launched the Mind Health program, providing comprehensive mental health support through education, prevention, and treatment. The program offers free access to a range of digital tools including a Mood Gym, Mental Health Guru, and Smiling Mind, allowing users to conduct online learning and mindfulness exercises at any time. This program has also been recently enhanced to include a Mind Health Network to provide professional treatment and concierge-like support services. Users can find information on mindfulness and meditation as well as priority access and preferential rates to a range of personalized treatments and support packages delivered by experienced mental health specialists.

Evolving evidence

As product development evolves, so does our understanding of lifestyle risk factors.  BMI, for example, was long considered an important measure of health for mortality risk assessment. We now recognize that body fat distribution – where you carry the weight rather than how much you carry – may be an important predictor of mortality, and those who carry excess fat in the abdominal area have a greater risk for numerous diseases, such as diabetes, hypertension, hypertriglyceridemiaischemic heart disease, and some cancers.  BMI, which is a measure of body fat based solely on height and weight, does not differentiate between lean and fat mass and is therefore a crude measure of risk.

For example, consider professional athletes: using BMI, many of them would be classified as obese. Furthermore, research has shown that nearly one-third of individuals classified as obese, based on their BMI, are actually metabolically healthy, while about one-quarter of individuals classified as having a healthy BMI have a metabolic disease.

Tech-driven data solutions

Today, several low-cost and non-invasive digital solutions can measure key anthropometric data and body composition through a smartphone. By incorporating artificial intelligence and smartphone technology, these tools may be able to identify those individuals who may be of normal weight but display obesity-related phenotypic characteristics. This subgroup of individuals are classified as metabolically obese but normal weight, and they can display an altered insulin sensitivity, higher abdominal and visceral fat, and an increase in lipids and blood pressure, and therefore are at higher risk of Type 2 diabetes and cardiovascular disease.

See also: Product Development: Expanding Life Insurance for Diabetics

We know that lifestyle choices significantly impact longevity, and wearable and wellness application data open up exciting possibilities for insurers to better understand how behaviours impact health outcomes. But many challenges remain, and researchers and insurers will need to guard against unintentional bias in algorithms, comply with any regulations and industry codes of conduct, and properly assess the independent impact of adding additional risk measures to insurance models. It is imperative that researchers verify accuracy of the technology, check for reasonability based on existing literature, and understand the underlying logic of calculations to reach replicable and scientifically sound conclusions.

See also: Digital Healthcare and Taming Medical Inflation

Beyond the traditional transactional relationship of simply selling a policy or collecting a premium, insurance companies now have the opportunity to expand their engagement with consumers and serve as long-term partners in health, truly helping policyholders live longer and healthier lives. In the aftermath of COVID-19, the need for insurance and meaningful consumer care has never been clearer. Wellness products will be increasingly relevant, and innovation will be crucial in order to continue to meet the needs of consumers whose lives and lifestyles have been upended by a global pandemic. More than ever, wellness applications can play a critical role in supporting the long-term health and well-being of the global population – and the time may finally have arrived for broader adoption in the industry.

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Meet the Authors & Experts

Julianne Callaway
Julianne Callaway
Vice President and Senior Actuary, Strategic Research, Global Actuarial Pricing and Research
Diana Bosworth
Diana Bosworth
Senior Research Analyst, Strategic Research