Digital Insurance Agenda

Discovery combines behavioural science and technology into a shared-value insurance model

Written by Roger Peverelli and Reggy de Feniks - Founders The DIA Community on Sep 14, 2017

When the South African insurer Discovery was founded back in 1992, the mission was to create a health insurance model that would make people healthier. Twenty-five years later this core purpose is still the compass for every move the company makes to help customers along the journey for better health and well-being. Adrian Gore, founder and CEO of Discovery: “If you promote healthier behaviour, you can offer more sustainable insurance. Behavioural science says that people need incentives to change.” Discovery’s shared-value insurance model, enabled by its wellness program Vitality, is based on these two beliefs. The Vitality program is a complete wellness system that tracks everything from physical activity to nutrition over the course of a person’s life.

It combines engaging policyholders through personalized and regular interaction, motivating and incentivizing them to manage their wellness, live better and to make healthier choices through tailored programs. It also provides clients with access to a broad range of wellness and prevention pathways and rewards healthy behaviour. This brings value for them and for society. Behaviour is measured clinically and actuarially through engagement, and in doing so, it enables dynamic pricing of individuals’ risk. The customer journey starts with clients receiving personalized health goals. Based on the science of behavioural economics, clients will be supported in achieving their personal health and fitness objectives through a three-step approach: know your health, improve your health and enjoy rewards.


Photo: Discovery Founder and CEO Adrian Gore

Clients that use wearables such as Fitbit, Garmin and Polar can for instance earn points by logging their workouts. A broad network of partners covers a complete range of lifestyle activities (e.g. nutrition, gyms, travel) including Woolworths, British Airways and Virgin Active. For example, when clients buy healthy food at grocery stores that are partners of the Vitality programme, they get a 25% discount on the healthy food items they buy.

The scale of the program is significant and makes it difficult to copy. Over six months in 2015 nearly 900,000 discounted movies were watched by Vitality members in South Africa and the UK, and in South Africa alone a Vitality member works out at a partner gym every 0.85 seconds and R19 million (1.2 million euro) is spent on healthy food items every day. The competitive advantage for Discovery lies in its ability to understand how best to structure incentives to get the best health outcome. The program is therefore dynamic and changes continually as the business learns how individuals respond to incentives and how this impacts health outcomes over the long term.

During the past year, Discovery introduced Vitality Active Rewards, an innovative new benefit that offers clients immediate rewards in the form of a free coffee or smoothie every week if they achieve individual, short-term physical activity goals based on their exercise history and level of fitness. This benefit was introduced based on research that shows regular exercise is one of the best ways to improve health in the long term. Discovery’s ground-breaking Vitality program is expanding across the globe through partnerships with Ping An in China, AIA in a number of other Asian countries, John Hancock in the US, Manulife in Canada, Generali in Europe and Sumitomo and SoftBank in Japan. The Vitality Network is a collective of partner insurers that subscribe to the Vitality model and take part in global reward partnerships, technology collaborations and academic and media partnerships. Adrian Gore concludes: “Such partnerships expand our ability to achieve better health and value for clients, superior outcomes for the insurer, and a healthier society. We are excited to see how this will enhance the lives of even more people across the globe.”

This article is also in our new book Reinventing Customer Engagement. The next level of digital transformation for banks and insurers.
The book includes 75 contributions of thought leaders inside and outside the industry, from Alipay and Ping An to Moven and Lemonade. It is easy to read and nice to the eye. With more than 200 best practices from across the globe the book offers a great source of inspiration.
The book is the sequel of the worldwide bestseller ‘Reinventing Financial Services’ that was published in eight languages and sold more than 100,000 copies.
More info at www.reinventingcustomerengagement.com

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