A new category of insurance that makes people healthier, and benefits society

Vitality Shared-Value Insurance: a business model that rewards healthy living - changing insurance for good.

The Vitality Shared-Value Insurance model was founded on Discovery’s core purpose of making people healthier and enhancing and protecting their lives. It is based on Vitality, a scientifically-validated health promotion program. Vitality draws on behavioral economics, to support, guide and incentivize individuals to improve their health. When integrated into insurance products, it allows for the dynamic pricing of risk over time based on people’s engagement in their health. This results in material benefits shared between the insurer (more profits), policyholders (greater health and financial rewards) and society (a healthier, more productive workforce).

A new category
of insurance that makes
people healthier,
and benefits
society

Vitality Shared-Value Insurance: a business model that rewards healthy living - changing insurance for good.

The Vitality Shared-Value Insurance model was founded on Discovery's core purpose of making people healthier and enhancing and protecting their lives. It is based on Vitality, a scientifically-validated health promotion program. Vitality draws on behavioral economics, to support, guide and incentivize individuals to improve their health. When integrated into insurance products, it allows for the dynamic pricing of risk over time based on people’s engagement in their health. This results in material benefits shared between the insurer (more profits), policyholders (greater health and financial rewards) and society (a healthier, more productive workforce).

This model is being exported to major markets around the world through

THE GLOBAL VITALITY NETWORK

The Global Vitality Network is an alliance of leading insurance organizations around the globe using Vitality Shared-Value Insurance to transform their insurance offerings in their markets.

This model is being exported to major markets
around the world through

THE GLOBAL VITALITY NETWORK

The Global Vitality Network is an alliance of leading insurance organizations around the globe using Vitality Shared-Value Insurance to transform their insurance offerings in their markets.

VITALITY SHARED-VALUE INSURANCE

What is shared-value?

Shared-value was defined in a Harvard Business Review article by Professor Michael Porter and Mark Kramer as a framework to create economic value, while at the same time addressing a societal need. The idea is simple, business models can and must address social issues at profit, and Vitality Shared-Value Insurance is a case study of this in the insurance domain.

HOW VITALITY
WORKS

Number Know your health

Do various health assessments and checks to understand your current health status and how to improve it.

Number 2 Improve your health

Use the programs and access to partners to get active, eat healthily and reach your health improvement goals.

Number 3 Enjoy the rewards

Engage with Vitality to improve your status - the higher your status, the better your travel, lifestyle and shopping rewards from global partners.

HOW VITALITY WORKS

Know your
health

Do various health assessments and checks to understand your current health status and how to improve it.

Enjoy the rewards

Engage with Vitality to improve your status - the higher your status, the better your travel, lifestyle and shopping rewards from global partners.

Improve your health

Use the programs and access to partners to get active, eat healthily and reach your health improvement goals.

What happens when Vitality is plugged into insurance systems?

When integrated into insurance, the business model that emerges - Vitality Shared-Value Insurance - enables dynamic pricing of insurance and additional value creation for insurers, clients and society.

Technology

Seamless, verified collection and computation of health data, navigation of health pathways and fulfilment of rewards.

Data set

Over 30m life years on the correlations between incentives and behavior change, between behavior change and risk.

Dynamic pricing engine

Generates rating factors for insurance, and a reinsurance capability to deploy these factors in different markets.

What happens when Vitality is plugged into insurance systems?

TECHNOLOGY

Seamless, verified collection and computation of health data, navigation of health pathways and fulfilment of rewards.

DATA SET

Over 30 million life years of data on the correlations between incentives and behavior change, between behavior change and risk.

DYNAMIC PRICING ENGINE

Generates rating factors for insurance, and a reinsurance capability to deploy these factors in different markets.

Vitality Shared-Value Insurance is profound because there are no trade-offs – economic value is created and shared amongst insurers, clients and society, and everyone benefits from improved health.

Lower claims
Healthier lives stay on longer
Improved margins
Improved profits

Better pricing that changes as risk changes
Improved health, longer life
Incentives from improved health

Healthier society
More productive workforces
Reduced health care burden and reduced medical costs

With Vitality Shared-Value Insurance, insurers have the ability to help "make the healthiest choice, the easiest choice" and to monetize this positive behavior change. The model is easily replicated for different markets and agencies, both of which contribute to the model’s scalability and impact.

Vitality Shared-Value Insurance Model

Value Member

Incentive Member

Behaviour Incentive

Bent q(x) Behaviour

Value Bent q(x)

Discovery has codified the mathematics that underpin Shared-Value Insurance.

Simply put: the economic value created per member is a function of how the incentive per member generates behavior change; how per unit of behavior change, risk is reduced; and how risk reduction leads to value generation, which offsets the original incentive and enables surplus sharing between insurer and member

Mathematics of Vitality Shared-Value Insurance equation for mortality and morbidity

Value Member

Incentive Member

Vitality Age
Vitality Points
Vitality Status
Vitality Rewards

Behaviour Incentive

Screening
Exercise
Nutrition
Weight Loss

Bent q(x) Behaviour

Morbidity & Mortality
Accidents
Defaults

Value Bent q(x)

Health Insurance
Life Insurance
Short-term Insurance
Banking

Built on 35 million years of data > 5 million years of mortality data.

Underpinning each component of the equation are assets – spanning expertise in behavioural economics, epidemiology, actuarial science – than manifest in products for all our adjacencies. This chassis is central to everything Discovery does – and guides innovation across the group.

Vitality Shared-Value Insurance is profound because there are no trade-offs – economic value is created and shared among insurers, clients and society, and everyone benefits from improved health.

Lower claims
Healthier lives stay on longer
Improved margins
Improved profits

Better pricing that changes as risk changes
Improved health, longer life
Incentives from improved health

Healthier society
More productive workforces
Reduced health care burden and reduced medical costs

Vitality Shared-Value Insurance is profound because there are no trade-offs – economic value is created and shared among insurers, clients and society, and everyone benefits from improved health.

Lower claims
Healthier lives stay on longer
Improved margins
Improved profits

Better pricing that changes as risk changes
Improved health, longer life
Incentives from improved health

Healthier society
More productive workforces
Reduced health care burden and reduced medical costs

Vitality Shared-Value Insurance is profound because there are no trade-offs – economic value is created and shared among insurers, clients and society, and everyone benefits from improved health.

Lower claims
Healthier lives stay on longer
Improved margins
Improved profits

Better pricing that changes as risk changes
Improved health, longer life
Incentives from improved health

Healthier society
More productive workforces
Reduced health care burden and reduced medical costs

Vitality Shared-Value Insurance is profound because there are no trade-offs – economic value is created and shared among insurers, clients and society, and everyone benefits from improved health.

Lower claims
Healthier lives stay on longer
Improved margins
Improved profits

Better pricing that changes as risk changes
Improved health, longer life
Incentives from improved health

Healthier society
More productive workforces
Reduced health care burden and reduced medical costs

Vitality Shared-Value Insurance is profound because there are no trade-offs – economic value is created and shared among insurers, clients and society, and everyone benefits from improved health.

Lower claims
Healthier lives stay on longer
Improved margins
Improved profits

Better pricing that changes as risk changes
Improved health, longer life
Incentives from improved health

Healthier society
More productive workforces
Reduced health care burden and reduced medical costs

This model is being exported to major markets
around the world through

THE GLOBAL VITALITY NETWORK

Leading insurers have integrated the Vitality Shared-Value Insurance model into their health or life insurance product offerings in the markets where they operate. Vitality Shared-Value Insurance reaches clients in the United States, Canada, China, Europe and Pan-Asia. These insurers have a combined client base of over 160-million clients, and the majority rank within the 2016 Fortune 500 index.

Vitality Shared-Value Insurance has been adopted in over 15 markets around the world. This model is now impacting 7 million lives globally.

MANULIFE VITALITY

Manulife has more than 20 million clients in 22 countries. Vitality Shared-Value Insurance is available in Canada through John Hancock’s parent company, Manulife. Manulife Vitality was introduced in September 2016.

Click here for more information.

JOHN
HANCOCK
VITALITY

John Hancock Vitality brings Shared-Value Insurance to the United States market. Since its launch, John Hancock Vitality has received numerous awards for its transformative approach to life insurance.

Click here for more information.

GENERALI
VITALITY

Generali Vitality was launched in Germany in June 2016, and in France in January 2017. Take up of products in the Vitality Shared-Value Insurance category has been exceptional in this market where insurance is about more than protecting lives. It's also about improving lives.

Click here for more information.

DISCOVERY

Discovery is an international financial services organization, founded in South Africa. Its core purpose of making people healthier and enhancing and protecting their lives saw it disrupt and improve the South African health and life insurance markets more than 20 years ago. Since then it has opened insurers in the United Kingdom, and exported its Vitality Shared-Value Insurance model to leading global insurers to roll out in their markets.

Click here for more information.

PING AN INSURANCE GROUP

Discovery's partner in China is the Ping An Insurance Group of China, a prominent insurer with an excellent distribution footprint. In addition to a 25% equity stake in Ping An Health, Discovery has reached an agreement with Ping An Insurance Group to incorporate the Vitality Shared-Value Insurance model into life assurance products.

Click here for more information.

VITALITY

Through Vitality UK, Discovery operates in the private medical insurance, long-term protection and wellness markets in the United Kingdom. Vitality is offered as an integrated part of VitalityHealth and VitalityLife. VitalityHealth is one of the top private medical insurers in the UK and the only one that rewards people for leading a healthy lifestyle. VitalityLife is one of the top two protection providers in the independent financial adviser segment. These businesses have won several awards for product innovations, among those pioneered in the UK was Vitality Active Rewards.

Click here for more information.

SUMITOMO
LIFE

Discovery concluded a partnership with Sumitomo Life Insurance Company in Japan. Japan has the second-largest life insurance market globally, after the United States. Sumitomo Life has over 10 million policies in force and 18.1 billion in annualized premiums.

Click here for more information.

AIA VITALITY

Discovery's partner in Pan Asia is AIA. The Vitality Shared-Value Insurance model is part of the core insurance offering in Singapore, Australia, Hong Kong, the Philippines, Thailand and Malaysia. The model will also be introduced in more of their markets.

Click here for more information.

With Vitality Shared-Value Insurance, insurers have the ability to help "make the healthiest choice, the easiest choice" and to monetize this positive behavior change. The model is easily replicated for different markets and agencies, both of which contribute to the model's scalability and impact.

This model is being exported to major markets around the world through

THE GLOBAL
VITALITY NETWORK

Vitality Shared-Value Insurance has been adopted in over 15 markets around the world. This model is now impacting 7 million lives globally.

DISCOVERY

Click here for more information.

MANULIFE VITALITY

Click here for more information.

JOHN HANCOCK VITALITY

Click here for more information.

VITALITY

Click here for more information.

GENERALI VITALITY

Click here for more information.

PING AN INSURANCE GROUP

Click here for more information.

AIA VITALITY

Click here for more information.

SUMITOMO LIFE

Click here for more information.

The Vitality Shared-Value Insurance model emerges giving leading insurers access to a unique set of global assets

Technology

Seamless, verified collection and computation of health data, navigation of health pathways and fulfilment of rewards.

Dataset

Over 30m life years on the correlations between incentives and behavior change, between behavior change and risk.

Dynamic pricing engine

Generates rating factors for insurance, and a reinsurance capability to deploy these factors in different markets.

A recent application in the Vitality Shared-Value Insurance model is the launch of

Vitality Active Rewards with Apple Watch

- a global collaboration between Vitality and Apple to create a scalable platform that promotes, tracks and incentivizes physical activity.

This offering combines the functionality and appeal of Apple Watch with frequent incentives to encourage healthy behaviors.

The increased physical activity of Vitality members generates actuarial surplus in the insurance product, which is used to fund the cost of Apple Watch for highly engaged members.

Early results from South Africa demonstrate that physical activity levels have increased by 81% since the introduction of this benefit.

The benefit is now available to over 1.1 million Vitality members in United States, the United Kingdom, China and South Africa, with a further roll-out to several new markets planned over the next 12 months.

Data and intellectual property

The Global Vitality Network houses a centralized data base that is used to inform:

Optimal shared-value product design and pricing for particular markets

The impact of positive initiative selection and future lapse and mortality improvements (with reinsurance set by Vitality status), which can lead to an immediate uplift in value of new business

The improvements in long-term mortality and morbidity as a function of sustained and changed engagement in activities, leading to better intervention design

How to drive engagement and positive renewal selection through specific targets

Targeted and global best-of-breed health programs

Partners in the Global Vitality Network can provide their clients with access to tailored and nondiscriminatory programs that focus on specific health goals. These programs, that draw on the latest thinking in their fields, are endorsed by industry experts to change risk. Programs include smoking cessation, weight loss, as well as mental vitality and healthy ageing during later life.

Vitality Active Rewards

In partnership with Apple, Vitality Active Rewards with Apple Watch enables the real-time measurement and incentivizing of wellness behavior, as well as the creation of personalized goals.

Vitality Active Rewards with Apple Watch has shown success in changing wellness behavior and segmenting insurance risk in South Africa, the UK, the United States and China.

Weight Loss Rewards

Short-term goal setting and encouragement to reach a healthy body weight. Get surprise rewards and cash back on purchases from HealthyFood partners for reaching goals and maintaining them along the program cycle.

Smoke-free Rewards

Self-tracking tools, community, professional and other valuable support to quit smoking. Use a combination and get encouragement to boost the ‘quit rate’. Enjoy supportive rewards along the way to become smoke free

Healthy Mind Rewards

A healthy mind needs enough sleep, a fit brain and ways to cope with the stresses of daily life. Follow a tailored program to guide you on everything your mind needs to be at its healthiest and see your rewards add up.

Vitality for Seniors

People are living longer. Do so in good health with this program developed for healthy ageing of body and mind after the age of 65. Complete relevant assessments and screenings, and get support in medicine adherence, mental wellbeing and physical strength.

Recognizing the differences between markets and their insurance products, Vitality has developed a suite of proprietary insurance models. These models share value with clients in powerful ways – such as premiums reductions, cover enhancements, or investment boosts.

Global and shared brand efficiencies

The Global Vitality Network has numerous brand mechanisms are shared among partner insurers. These mechanisms are geared towards the Network's ownership of the Vitality Shared-Value Insurance category.

Vitality Shared-Value Insurance responds to a changing world

Society expects companies to make a difference

The financial crisis led to people losing faith in institutions. Client needs are more complex and are changing. The new-generation consumer wants to know companies have a purpose and make a difference.

Technology is increasingly prevalent and influential

More people are using technology today to measure their activity and track their health – digital disruption is enabling people to live longer, healthier lives. Establishing a stronger link to insurance risk and pricing is an imperative.

Behavior affects insurance risk

Traditional insurance models do little to recognize the behavioral nature of risk, or to actively promote and incentivize better health. With sickness and mortality now overwhelmingly caused by lifestyle choices that are dynamic over a client's lifetime, this approach no longer makes sense.

The Vitality Shared-Value Insurance Model

emerges giving leading insurers access to a unique set of global assets

TECHNOLOGY

Seamless, verified collection and computation of health data, navigation of health pathways and fulfilment of rewards.

DATA SET

Over 30 million life years of data on the correlations between incentives and behavior change, between behavior change and risk.

DYNAMIC PRICING ENGINE

Generates rating factors for insurance, and a reinsurance capability to deploy these factors in different markets.

A recent application in the Vitality
Shared-Value Insurance model is the
launch of

Vitality Active Rewards with Apple Watch

a global collaboration between Vitality and Apple to create a scalable platform that promotes, tracks and incentivizes physical activity.

This offering combines the functionality and appeal of Apple Watch with frequent incentives to encourage healthy behaviors.

The increased physical activity of Vitality members generates actuarial surplus in the insurance product, which is used to fund the cost of Apple Watch for highly engaged members.

Early results from South Africa demonstrate that physical activity levels have increased by 81% since the introduction of this benefit.

Data and intellectual property

The Global Vitality Network houses a centralized data base that is used to inform:

Optimal shared-value product design and pricing for particular markets

The impact of positive initiative selection and future lapse and mortality improvements (with reinsurance set by Vitality status), which can lead to an immediate uplift in value of new business

The improvements in long-term mortality and morbidity as a function of sustained and changed engagement in activities, leading to better intervention design

How to drive engagement and positive renewal selection through specific targets

Targeted
and global best-
of-breed health
programs

Partners in the Global Vitality Network can provide their clients with access to tailored and nondiscriminatory programs that focus on specific health goals. These programs, that draw on the latest thinking in their fields, are endorsed by industry experts to change risk. Programs include smoking cessation, weight loss, as well as mental vitality and healthy ageing during later life.

Vitality Active Rewards

In partnership with Apple, Vitality Active Rewards with Apple Watch enables the real-time measurement and incentivizing of wellness behavior, as well as the creation of personalized goals.

Vitality Active Rewards with Apple Watch has shown success in changing wellness behavior and segmenting insurance risk in South Africa, the UK, the United States and China.

Weight Loss Rewards

Smoke-free Rewards

Healthy Mind Rewards

Vitality for Seniors

Global and shared brand efficiencies

The Global Vitality Network has numerous brand mechanisms that are shared among partner insurers. These mechanisms are geared towards the Network’s ownership of the Vitality Shared-Value Insurance category.

Vitality Shared-Value Insurance
responds to a changing world

Society expects companies to make a difference

Technology is increasingly prevalent and influential

Behavior affects insurance risk

Vitality Shared-Value Insurance
responds to a changing world

Society expects companies to make a difference

Technology is increasingly prevalent and influential

Behavior affects insurance risk

A new category of insurance that makes people healthier, and benefits society

A new category of insurance that makes people healthier, and benefits society