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HOT TOPIC | Lifestyle insurance is on its way to life!

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HOT TOPIC | Lifestyle insurance is on its way to life!

The insurance business is changing and this transformation is no ordinary evolution. It is already apparent that the magnitude of change and the speed at which the change will move through the industry will be significantly higher than ever before. It will be a fundamental change, both for insurers and their clients, through which insurance businesses will reach the next level.

«Today, two polar worlds still exist»

There is the insurance startup world and the «InsurTech Movement» that promotes internet of things, telematics, data analytics as well as robotics, AI and blockchain solutions. On the other side, we have the traditional insurance world which is the existing and predominant reality. In this reality non-digital sales, paper-driven, non-real-time underwriting and manual processes still prevail.

«In this traditional insurance world an insurer – especially a life insurer – has a low level of customer engagement, usually limited to engagement at times of sale, renewal or alteration and claim»

This results in the industry’s renowned acquisition, retention and relevance problems with its customers. However, the acknowledgement of these issues presents a great incentive to entertain innovative concepts to generate more customer centricity and in turn, higher customer loyalty and ultimately retention. The lack of customer engagement and positive, regular interactions can be overcome by connecting with clients via sensor devices and similar types of new, widely available, technology.

Furthermore, insurers can use data from these electronic devices that monitor vital signs such as heart rates, activity levels, sleep patterns and others data sets for use in tailored underwriting and pricing purposes.

The well-known Vitality program is one of such initiatives, offering to policyholders not only a premium reduction but positive influence on their health and positive daily interactions with their insurer. There is talk of so-called lifestyle insurance programs.

In the new era of hyper connected society which is embracing smart phones, smart homes, smart health, smart mobility (and more) it is just a question of time before we see the uptake of smart insurance in a more widespread manner.

«Providing just insurance coverage is no longer compelling enough»

Instead, customers seek more meaningful value at all times from their insurer. In addition, insurance carriers may help customers live a healthier and more conscious lifestyle and be rewarded for it. Smart technology will streamline how consumers provide information to insurers and will increase the insurers’ ability to interact with consumers outside of the standard inception, claim and renewal processes.

State of the union in German speaking countries

Generali introduced its lifestyle program Generali Vitality in the German life insurance market in 2016. The year after they launched it in Austria, too. Earlier this year, Generali announced that they plan to expand their lifestyle insurance program also to the health insurance segment soon.

«Lifestyle Insurance is a new and smart way to engage with customers»

While in Germany some health insurers refuse steadfastly to make use of tracking devices, and ethics boards fear that the idea of insurance is at risk, the digital all-round insurer ONE (WeFox Group) and Munich Re just have created a joint venture2 called ONE Coach, which will enable customers to monitor in real time how their individual lifestyle choices affect their risk assessment score.

It seems that the next big thing in insurance will be a 360° view on a single customer combined with «smart insurance». There are some other providers and startups that follow a similar approach. One of these is WeSavvy.

WeSavvy envisions a more connected and customer focused insurance industry emerging, where the goals of the customer are at the heart of the insurance experience with a 360° view of the customers’ needs and wants. Thus, with a better understanding of risks and a better insight into customers, WeSavvy supports an insurer in providing a much better service to customers at a fraction of existing costs. This is interesting for a life insurer but especially also for insurance groups that are running several insurance segments and aiming to deliver an all-round carefree insurance package.

«Lifestyle insurance (or more in general smart insurance) will make an insurance company a real companion through life!»

The bottom line

Life insurers that are running lifestyle insurance programs will benefit threefold:

  • Positive interaction: With more positive touch points and thus multiple opportunities to interact with customers
  • Micro risk management: Opportunity to drive customers to a healthier and conscious lifestyle helps to reduce claims ratio of in force business
  • Deeper understanding: Better insights into customer behaviour and needs and thus countless opportunities to offer situative and tailor-made products and services


1 Photo by Crew on Unsplash

2 One Insurance and MunichRe join forces


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