The best incentive insurers can offer their customers beyond the bonus of a healthier life is a life insurance policy that reflects changing health patterns over the lifetime of a policy.
To make this work there needs to be a fundamental shift in how customers engage with insurance companies. True engagement works when there are valuable, demonstrated health and financial incentives.
From counting daily steps to monitoring calorie intakes, many people today are using fitness trackers and apps to help them stay healthy. However, just as many people abandon their gym memberships within the first weeks or months of signing up, digital fitness technology tends to only be used in the long term when combined with other strategies.
But what if getting fitter and eating better – and keeping a digital record of your behaviour – was a matter of life and death? Diabetes increases the risk of stroke or heart attack by more than 50%. The disease and its related complications contribute to a significant portion of life insurance claims costs.
Nine out of 10 diabetics have type 2 diabetes, a condition caused predominantly by by lifestyle factors such as poor diet, lack of exercise and sleep.
Putting diabetes into remission
Research shows that weight loss is a key driver for reducing risk of type 2 diabetes. Maintaining a healthy body weight, and modifying other factors such as sleep, exercise and mental health all contribute to reduced risk and better management of diabetes.
A study by the University of Glasgow, Newcastle University and Diabetes UK invited 306 patients from 49 doctors' surgeries across Scotland and north east England to take part in an intensive weight loss programme. All participants had been diagnosed with type 2 diabetes for at least six years.
After just 12 months of the programme, nearly half of all participants had put diabetes into remission and come off their medication. The proportion of people putting diabetes into remission in the study correlated with the amount of weight they lost: 7% of those who lost 0-5kg; 34% of those who lost 5-10kg; 57% of those who lost 10-15kg; and 86% of those who lost 15kg or more. While this is a relatively small study, it could have profound implications for how diabetes is treated.
Turning to tech
The global cost of treating diabetes is approaching USD 1.3 trillion per year. It is set to rise, as each year 5 to 10% of those with pre-diabetes develop into full type 2 diabetes. If, as some research suggests, significant weight loss can put type 2 diabetes into remission, then technology that helps encourage weight loss could be vital in stemming the global diabetes epidemic.
One effort already helping to move diabetes into remission is the Gro Health Diabetes Management Programme. This digital health and nutrition platform provides access to one of the world's largest and most active support communities for diabetics, pre-diabetics and those overweight. It walks people through a 12-week structured programme to address all aspects of modifiable risks including sleep, nutrition, activity and stress.
The centrepiece of the programme is a smartphone app used by over 370,000 people. It includes many of the features found in fitness tracker apps, such as recording daily food intake and exercise, and the ability to connect with wearables such as smartwatches.
However, this programme is specifically targeted at reducing obesity and diabetes, and as a result includes features such as the ability to connect with smart blood glucose monitors. It also provides structured video modules with how-to guides and coaching to encourage people to stick with the program. And it uses artificial intelligence (AI) to make sure all of this support is personalised to each user and their goals. As a result of such targeting, 70% of users remain engaged 12 months after downloading the app, and 39% have put their type 2 diabetes below the type 2 threshold.
Swiss Re is working to put the power of this programme into the hands of life and health insurers – and the policyholders they serve.
"Many diabetes guidelines suggest a multi-faceted approach to managing the disease. With the suggestion this is a long lasting disease," says Kelvyn Young, the Head of Life & Health Partnerships within Swiss Re's product solutions team.
"But now," Young explains, "more and more programmes are showing that a strong focus on changes in nutrition and lifestyle can reduce weight, lower A1c levels and in many cases help diabetics reduce insulin dependence. There is also a knock-on benefit with other factors like improved blood pressure and cholesterol."
Swiss Re has modelled the impact of consistently using an app like the Gro Health Diabetes Management Programme on the cost of life and health insurance claims. It found that results are significant for programme participants and these improvements translate into lower claims costs that can be up to 5% or more depending on a number of variables.
“This is one solution that's demonstrating clear positive outcomes and the ability to help people put diabetes into remission,” Young says. “Savings could be reflected in the premium, if you had a dynamic life product where premiums could change as your health improves.”
However, developing such “dynamic” products in the life and health insurance sector will require a fundamental shift in how we engage with policyholders over time and price and underwrite their policies.
Today health conditions are underwritten when life insurance policies are sold. This approach is taken because, in general, health deteriorates over time, and so to protect the consumer, insurers lock in their terms from the start. However, this prevents companies from more accurately assessing risk over time for those conditions that an individual can influence, according to Swiss Re Life & Health Product Strategy Manager Alan Martin.
“Many health risks are modifiable, meaning they're within people's control,” says Martin. “If we create a more dynamic product, then people can benefit from their positive health – and receive financial incentives."
Just as telematics products are helping drivers understand how they can improve their driving, and potentially lower their insurance premiums, using technology to track modifiable risk areas such as smoking and diabetes could prove beneficial for millions of life insurance policy holders or those seeking coverage.
"That person who came in to the insurance contract as an overweight diabetic who is smoking, well…. when they give up smoking, and when they lose weight, and get their diabetes under control, they might see their improved health reflected in lower premiums, not to mention enjoying the benefits of living a healthier, longer life,” says Martin.
However, the real win will come from improving long-term engagement with policyholders. We can redefine how they view underwriting: no longer will underwriting be something done once for the insurer's benefit only, but takes place as part of an ongoing assessment that helps an individual better manage their own health risks. It is about transforming the relationship between insurers and the insured, where insurers are seen as partners in helping policyholders lead healthier lives.
"We've got an opportunity to help people make changes and be as healthy as they can be," says Martin. “We think that’s good for them and that’s good for us, too. And of course, if it's good for us we can reflect that value back in more attractive products and incentives.”
- The Authentic Role an Insurer Can Play as ‘Personal-Risk Manager’ – Advisor Magazine
- Why would a leading global reinsurer be interested in nutrition? – British Medical Journal
- Outcomes of a Digitally Delivered Low-Carbohydrate Type 2 Diabetes Self-Management Program – JMIR Diabetes
- New ways of managing diabetes – Swiss Re
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