How to successfully implement a well-being business model

A large insurer in South Africa has been using a wellness program since 1997 to raise public awareness of healthy living. The success of their program has resulted in over three million members worldwide including joint venture partnerships with insurers in the U.S. and U.K. One of the primary reasons for the success of the program is a five-step approach to well-being, which includes:

1. First, policyholders (or “members”) go through a comprehensive personal health review at the insurer’s venue or recognized hospitals.
2. The health assessment determines the member’s medical age, as well as individualized, personal behavior goals (e.g., exercise or diet changes) and lifestyle changes (e.g., quitting smoking).
3. Members then receive personal guidance that includes six components (disease management, smoking cessation, mental health, nutrition, preventative care, and physical activity).
4. Members earn points every day based on their behaviors and attain one of four levels, – blue, bronze, silver, or gold.
5. They can use their points towards travel, leisure, and shopping rewards (e.g., discounts on wearable sensors or healthy food or gym memberships); this often reinforces desired behavior.

 The insurer has used this program to underpin its health insurance, life insurance and auto insurance offerings. For example, the fifteen year survival probability without coronary artery disease, stroke or diabetes for a 50-year-old male smoker is 56%. However, this probability increases to 71% when the person stops smoking, increases to 81% when he exercises, and increases to 86% when he loses weight. The insurer then uses the data and insights the program generates to underwrite and redesign products in all three areas and in cross-selling. The company has been profitably growing and expanding internationally over the past decade. Last year, its profits increased by 18% and showed new business increases of 13% in health, 8% in life and 53% in short-term P&C. Moreover, the success of the company’s business model has led to successful partnerships with U.S. and U.K. health and life insurers.