Policies that reward clients for reaching positive goals could become more commonplace, as evidence suggested they were working better for consumers.
One such policy, Vitality’s ‘Healthy Living Programme’, offers consumers the chance to track healthy activities and shop for healthy food, and their premiums are managed accordingly.
It means members can control their underlying risk to the insurer through engagement with the programme, in turn earning rewards and lower premiums.
Vitality's latest results showed that for 2018, the provider saved consumers a total of £40m in premiums and handed out £81m worth of rewards and benefits — including discounts on healthy food and gym memberships, as well as cinema tickets and free coffees.
Through the programme the provider tracked 41m healthy activities. These included gym visits, park runs, day-to-day exercise sessions and wellness and meditation time.
According to Vitality, health and wellness management is correlated with a lower number of claims from its clients.
Over the past five years, Vitality found members who engaged in the Healthy Living Programme had a substantially lower number of life cover claims across all age groups compared to those who didn’t engage.
Overall, Vitality paid out 99.8 per cent of all life claims, 97.8 per cent of income protection claims and 91.2 per cent of serious illness cover claims.
Deepak Jobanputra, deputy chief executive at VitalityLife, said: "Vitality’s core purpose is to make people healthier and enhance and protect their lives.
"[Our plans] are coupled with our unique shared-value insurance model that helps encourage our members to lead a healthier lifestyle which helps them live longer and delays the onset of illnesses.
"This approach creates additional economic value which we can share with our members in the form of benefits and rewards."
Alan Knowles, chair of the Protection Distributors Group, said Vitality was leading the way in aligning protection insurance with a person’s long-term health.
He said: "In many ways their offering is quite simple, if you eat right, exercise and stay healthy, they can reward you with cheaper insurance premiums.
"There are two key benefits of this. First, the client hopefully focuses on staying healthy and uses the policy benefits as a motivator to remain healthy.
"Second, by being healthy the chance of a claim being made on the policy significantly reduces. It's a win/win for both the client and Vitality."
He said this kind of policy was the way forward for protection for those who can manage their health and have the drive to live healthily.
Paul Yates, product strategy director at iPipeline, agreed that providing customers with the ability to engage with their health and finances was a key focus for protection.
He added: "By adopting a genuine people-centred approach, we have the ability to move away from the ‘set the cover up and forget about it’ mentality."
Associate director at Cavendish Ware, Roy McLoughlin, said policies like Vitality’s mirrored how society was gradually moving towards taking more responsibility over looking after their health as well as being open about conditions such as mental illness and wellbeing.
"Protection insurance needs to be the underpin of all advice and evidence from Vitality in this report shows a positive way forward for the industry", he added.
imogen.tew@ft.com
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