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How Wellness-As-A-Service Works Can Drive Growth for Life and Health Insurers

Samantha Chow
30 Aug 2022

After a few years of navigating massive market uncertainty, large-scale claims payouts, an intense war for talent and low interest rates, life and health insurers and annuity providers are looking to spark new growth. In many cases, they are aiming to build on the digital operations they established during the pandemic to stay connected to customers, agents and brokers and their own workers.

Important initiatives to automate processes, modernize legacy systems and enhance key customer experiences are underway across the industry. And pressure remains to increase operational efficiency and reduce costs.

But insurers must also consider the opportunities represented by changing customer needs and attitudes. For instance, rising consumer and employer interest in holistic wellness – incorporating both physical and financial health – is one area where insurers are well positioned to develop new offerings and even entirely new value propositions.

Rising consumer interest in wellness can be attributed to several factors. Certainly, the COVID-19 pandemic played a role. The expanded use of wearable devices that track heart rate, sleep cycles, and fitness activity has motivated many consumers to live healthier lives. And a booming wellness economy demonstrates that these consumers are willing to invest in feeling and looking great.

Taking advantage of consumer interest in wellness

For insurers, the rise of wellness is an invitation to expand and enhance the value propositions. Standalone programs for financial wellness or physical fitness are not new, of course, and many have been quite effective in repositioning insurers as trusted advisors. But only recently have innovative insurers begun connecting the dots between physical and financial wellness and putting health at the heart of the business.

Integrating these offerings is critical because of the growing evidence that physical and financial health are closely related. Indeed, the pandemic made clear the intrinsic connection between physical health and financial security. More employers now recognize that healthier employees are more engaged, productive and loyal.

Of course, seizing the wellness opportunity won’t be easy. Most insurers have yet to establish compelling wellness-centric value propositions or build the necessary capabilities to deliver on them. To take advantage of the opening, insurers must undergo a profound shift in thinking as they move from being product-driven to truly customer-centric.

Delivering personalized wellness solutions at scale requires the use of powerful technology and more sophisticated data management and analytical capabilities. Both everyday operations and organizational cultures must become more data-driven and insight-led. The foundation will be advanced, integrated modular tech platforms that use artificial intelligence (AI), machine learning and other enabling technologies to deliver personalization at scale.

Enabling wellness-as-a-service

Wellness-as-a-Service offers a flexible model for life and health insurers to unlock a new era of growth and profitability by empowering employees and policyholders with tools, tips and guidance so they can take meaningful action in line with their goals and live the life they want to lead.

One advantage of Wellness-as-a-Service models is that it allows insurers to more deeply understand customer behaviors, engage more frequently and offer personalized services that are more likely to improve physical fitness, overall health and financial security for customers. They will also help insurers boost retention, reduce claims, and increase the accuracy of risk assessment and pricing. In other words, strong wellness strategies and programs are a win-win for consumers and insurers alike.

So what will it take to make these programs impactful for customers and beneficial for the industry? We believe the keys are:

Connecting with the right partners: Insurers can’t go it alone in delivering wellness-as-a-service. But they can build on their traditional risk management strengths and engage partners for additional offerings, capabilities and tech. For instance, health insurers might partner with life insurers and banks to develop richer financial education programs. The broadest partner networks might include grocery stores, gyms and yoga studios, fitness equipment companies, drug stores, pharmaceutical firms and hospitals and health systems. InsurTechs, HealthTechs and big tech platforms are other potential partners. In evaluating partners, insurers should consider whether their offerings are complementary and their cultures collaborative.

Developing ecosystems to expand product offerings and opportunities: The most successful partnerships will be operationalized via tech-driven ecosystems that provide customers with easy access to a range of services and solutions, as well as intuitive sales and service processes. Large employers may look to their insurance providers to build out dedicated ecosystems for their employees.

Strong APIs will enable ecosystem partners to connect and share data seamlessly. Robust security and data privacy protocols will allay consumer concerns and meet regulatory requirements. While first movers and early adopters are already showing what’s possible, most insurers have a long way to go to harness the power of ecosystems; today, only 40% effectively co-create or innovate with strategic or ecosystem partners.

Matching products and solutions to customer needs: Customers want from insurers what they receive from the other companies they do business with – on-demand services and tailored recommendations and rewards. The priority isn’t necessarily to develop new types of policies, but rather new product features and enhancements to specific touchpoints that enrich the overall experience and extend the core value proposition.

Gamified wellness apps for health tracking and expense management are proving effective in providing personalized, goal-based nudges and actionable tips and recommendations. These tools can be augmented with regular touchpoints for customized planning (e.g., portfolio rebalancing advice meetings) that suit some types of customers, while hyper-personalized rewards with tangible incentives for customers that follow tips and meet their goals are likely to increase engagement and boost loyalty over time.

Our upcoming inaugural World Life and Health Insurance report offers a roadmap to better understand customer needs, operationalize wellness strategies and unleash data-driven customer engagement.

Meet our Experts

Samantha Chow

Global Head, Life Insurance, Annuities, and Benefits Leader, Capgemini Financial Services
Samantha has over 20 years of experience in the L&A and A&H industries working for carriers in positions across the value chain, evaluating technology and consulting as an industry analyst, and leading the technology roadmap for policy administration systems.