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EXCLUSIVE: ‘Play to Win!’ – Alex King in ‘The Insurtech Magazine’

EXCLUSIVE: ‘Play to Win!’ – Alex King in ‘The Insurtech Magazine’ | Fintech Finance

Gamification helped L&H insurers engage a new generation of health-conscious cover holders. Alex King considers how digital worlds could help the industry’s first movers lock in the next 

Life and health insurers and the metaverse: are virtual worlds the answer for an industry struggling for relevance? They say anyone can sell an umbrella in a rainstorm. So it was that, during a deadly, once-in-a-century pandemic, life and health insurance providers began reporting double-digit increases in policy purchases, peaking at an 18.5 per cent increase in the US in March 2020.

But if you want truly stunning sales figure, consider this: during the pandemic period, the Corona beer brand saw consumption soar by 40 per cent in the UK, and by 20 per cent globally. L+H insurers might do well to question why a brand whose name you’d have thought would – given the circumstances – have put punters off, outperformed their own firms, geared up as they are to financially protect against such threats to life, health and wealth.

The answer, it seems, lies in consumers’ disengagement from what were once considered essential policies. According to research from LIMRA, the percentage of American adults with a life insurance policy dropped from 63 per cent in 2010 to just over half in 2020. A recent Deloitte survey found that only 20 per cent of those who’d never had mortality coverage were interested in buying it. According to Swiss Re, the global mortality protection gap now sits at $114trillion: a gigantic opportunity as well as a reflection of just how slowly the insurance industry has adapted to the demands of modern consumers.

But after some soul-searching, there are promising – even exciting – signs of movement from the famously risk-averse industry. Customer experience now tops the agenda, as David Priestly, who became Chief Digital Officer at Vitality in 2017, recently explained. “If you just concentrate on trying to deliver value for your customers – and creating an exceptional experience – more often than not, you’re going to do the right thing,” he said.

By this logic, touchpoints are seen as a priority. Millennials spend an average of six hours per day on their phones, across an average of 80 apps, yet their insurance provider ordinarily gets in touch just twice a year – once with a renewal email, and once with a receipt. Smartphone absorption is an open goal that L+H insurers have been scuffing the ball wide of for years.

Now they’re beginning to hit the net, leaning on gamification as an appealing, youthful way to generate dozens, if not hundreds, of touch points per customer per year. Vitality was one of the first L+H insurers to gamify health insurance, incentivising policyholders to lead healthier lifestyles via premium reductions and a rewards scheme, itself full of healthy treats. Several other insurers have since fallen in line, building game-like mechanisms of their own.

They include Sproutt, the Connecticut-based life insurer, which opted for a Quality of Life Index to score customers’ ‘hidden health’ – as revealed by AI and predictive analytics. A 15-minute quiz generates a score, which is immediately accompanied by bespoke health and wellbeing advice. The ‘health score’ generated by Zurich-based Dacadoo, meanwhile, is based on an astonishing 300 million patient hours of data. Dacadoo sells this scoring system to insurers, alongside a digital lifestyle coach and points-based rewards which can be redeemed in an online store.

Then there’s London-based YuLife, which offers group life insurance to employers. Overseen by the insurer’s digital mascot, Yugi the giraffe, YuLife users earn YuCoins: one for every mile they walk, or one for every two minutes they spend in mindfulness. Users can progress through Candy Crush-style levels, earning ShapChat-style streaks. Banked YuCoins are exchanged for vouchers to shop at the likes of Amazon, ASOS and Fitbit. The firm even has a Chief Wellbeing Officer, in the form of BBC Breakfast’s Dr. Rangan Chatterjee.

If all that sounds like a Millennial fever dream, you’re beginning to sense the direction of travel for an industry once associated with all things grey, dour-faced and dismal. Still, YuLife’s vibrant offerings are underpinned by a loftier goal. Having found that 65 per cent of employees say they’d do more physical activity if they were rewarded by their employer for doing so, YuLife is among a growing cadre of L+H insurers that believe gamified health objectives could actually make us all better and happier – reducing premiums for consumers and the volume of claims for insurers.

Whether or not that will turn out to be the case – and some doubt has been cast on these hopes by academic research into the benefits of health wearables – it’s certainly a more engaging value proposition than the ‘have kids; get life insurance’ sell of the past few decades. It’s getting young customers through the door, touching on areas of their lives that are meaningful and fun.

Once they’re through the door, they’re offered personalised health advice, incentives and tokens to spend on fashionable lifestyle products. Through this new approach, insurers are building new relationships with their customers – becoming ‘sticky’, even indispensable, and using the resultant increase in user data to generate more accurate, bespoke advice.

As YuLife’s Chief Product and Technology Officer, Josh Hart, recently told Business Leader: “For years, life insurance had simply been death coverage; we wanted life insurance to focus on life, and harnessing the latest technologies – AI, app development and the metaverse – was inevitably going to be key in realising that goal.”

YuLife’s virtual world of coins, quests and challenges qualifies as a metaverse in the broadest sense: an immersive digital space in which consumers are expected to spend more and more of their time and money in the coming decades. YuLife call it their ‘Yuniverse’. But out there in the wider constellation of metaverse platforms, opportunity knocks for forward-thinking businesses.

Since Facebook ‘went Meta’ in October 2021, Adidas, Puma and Under Armour have announced their involvement in what is now being called Web3.0. Ex-footballers David Beckham and John Terry have even been dabbling in the digital economy, the former as global ambassador of the DigitalBits blockchain, the latter in an ill-fated launch of a batch of NFTs which have since lost 90 per cent of their value.

Most relevant to L+H insurance providers is OliveX Fitness Metaverse, a digital health and fitness company that’s taking full advantage of play-to-earn experiences in virtual worlds. In The Sandbox metaverse, the firm is working with a number of fitness brands tto create digital clones of their products as NFTs. OliveX has also created a DOSE token, earned through running in the virtual game Dustland Runner, which it claims to be the world’s first blockchain fitness game, rewarding exercise with digital items that exist only in a virtual world.

All this might sound far-fetched, but it’s not a far cry from what L+H insurers have been building over the past half-decade. So, might moving into the metaverse be the insurance industry’s next leap forward? Ed Halsey, COO of hubb, the Glasgow-based insurance distributor that claims to be the world’s first metaverse-ready insurer, reckons it’s possible.

“There are opportunities there to create new kinds of experiences,” he says. “In insurance, we do a lot of golf days. So what if hubb held the first metaverse open, and everything’s branded and everything’s sponsored, and there’s an award ceremony with a little speech about hubb and what we do. That’s gamifying something. It’s a bit fun. It’s a bit different.

“Plus, early adoption is cheaper, it’s less saturated, and there’s way more visibility for brands, which is why I think the big brands have doubled down on it. At hubb, we co-work for two hours a day in the metaverse so that, when the metaverse does become a success, guess what? We’re two or three years ahead. Our staff already have familiarity, we have a lot of assets – we’re not playing catch up.”

It’s not especially common for insurers to be ahead of the curve, but in encouraging healthy lifestyles via gamification in virtual communities, L+H insurers appear to have hit upon something that the world’s biggest fitness and leisure brands agree might well take off. But what about insurance in the metaverse itself – is that fanciful or inevitable?

“I’ll bet that within the next 10 years somebody, somewhere, somehow, manages to find a way to get a virus into the metaverse that can be transferred between avatars,” predicts Halsey. “We need certain things to play out so that we understand what the risks will be. But the industry could begin collecting that data now – with small policies for certain digital assets.”

Bitcoin and Facebook sounded absurd in their infancy. Perhaps, after the intrepid first insurers make their way into the metaverse, the industry will come to realise that there’s another market, comparable in size perhaps to the mortality protection gap, to tap into. But Halsey’s of the opinion that the metaverse needn’t be a risky place at all.

“What we need to remind ourselves is that insurance is the natural response to risk,” he says. “So, in the metaverse, we need to put things in place to prevent that risk in the first place. Insurance should only ever be used as a tool that protects against those risks that can’t be avoided, and risk can be avoided in the metaverse – because it’s virtual, because it’s designed.”

That same sentiment is driving change across the L+H insurance industry, based on the recognition that new technologies can and should make the world a less risky place. Instead of selling umbrellas in a rainstorm, insurers are beginning to find ways to disperse the clouds. If the metaverse does live up to the hype, you’d expect first-moving insurers to have a potent new tool to further engage their customers, protecting their health and wealth in the real world – and perhaps the virtual one, too.


This article was published in The Insurtech Magazine #07, Page 40-41


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