Session Recap: Make it Easy, Use Technology & Keep Customers Motivated -- The 3 Keys to John Hancock’s Vitality Program Success
October 06, 2015 by Lauren Yildirim
This week, the Captricity team traveled to Boston for Insurance Networking News’ Insurance Analytics Symposium. To kick things off, our CEO Kuang Chen and Ed Walsh, Corporate VP of New York Life, took the stage to shed light on how insurers can gain better access to their data to improve critical underwriting processes.
We heard a number of great talks on Day 1, but our favorite was from Brooks Tingle, SVP of Marketing and Strategy at John Hancock (@JohnHancockUSA). Brooks spoke on the well known and highly publicized Vitality Program at John Hancock, a program that allows life insurance customers to affect their premium rate based on healthy habits (for example, how often they exercise, see their doctor or get a flu shot). The program is made possible through the availability of customer data - including from wearable devices - and has seen tremendous success over the past year.
Here are a few of our favorite takeaways:
Life insurance should be about behavioral science as much as it’s about actuarial science.
These days, half of all deaths are related to the lifestyle choices we make -- a dramatic shift from a few decades ago, when infectious diseases were the leading cause of mortality. What this means is, your daily habits, from the food you eat to the steps you take, will have a direct correlation to your eventual cause of death.
The question life insurers need to ask themselves is, “how can we incentivize our customers to think about and improve their health habits, now?” When policyholders live a long and happy life, it’s not only a benefit to the policyholder and their family but also to the insurer, who can maintain a longer relationship with their customer.
Brooks argues that if the Vitality Program helps people even incrementally improve their health, over time, this will fuel lower premiums for their customers and a competitive advantage for John Hancock -- a win-win for the customer and the insurer.
The buying experience in life insurance is still broken.
The typical interaction between a customer applying for life insurance and the insurer is anything but user-friendly. Brooks stated that it’s virtually impossible for insurers to receive high customer satisfaction marks because customers must go through an invasive and lengthy application process. And, what’s worse, once an application is approved, the customer typically has very limited communication with the insurer throughout the life of their policy.
“Life insurance ranks at the top of the list of things consumers know they should buy, but get no personal enjoyment from whatsoever.” - USA Today
John Hancock’s Vitality Program is attempting to change the model -- now if the customer wants, they can hear from their insurer in a positive way every day. For example, if a customer walks five thousand steps, they can opt-in to receive a congratulatory text from the Vitality Program and receive premium savings and rewards.
The Vitality Program is effectively changing the conversation -- it’s shifting from talking about dying, to talking about living. Traditionally, the motivation for buying life insurance is to protect your family. But with the adoption of wearable devices and incentivized health programs, life insurance customers are starting to take their health into their own hands when they purchase a policy.
Making insurance simple.
The biggest determinant of whether a new program or user experience (UX) will be adopted by policyholders is ease of use. The high enrollment rate for the Vitality Program is due in part to its easy-to-use interface. Customers young and old alike are engaging with John Hancock’s Fitbits, and mobile and web apps because they’ve been designed to make opting-in to healthier lifestyle choices easy and rewarding.
Customers don’t want to log on to a web app to notify their insurer that they’ve just finished a five-mile run -- they want a proactive engagement model where their exercise is tracked automatically via their wearable, and the insurer reaches out to assure the customer that it’s been tracked in the system.
In fact, Brooks mentioned that customers care about the ease of participation more than they care about the privacy issues surrounding sharing their personal data. Most notably, the Vitality Program is helping John Hancock tap into the resistant millennial market as a significant portion of Vitality Program users are first-time life insurance buyers.
Brooks Tingle is the SVP of Marketing and Strategy at John Hancock.
Stay tuned for our recap of the conference and follow us on Twitter @Captricity for real-time updates from the team!