As economies continue to develop, they also tend to age. Despite being wealthier, individual concerns therefore shift from mortality to morbidity, from survival to longevity and from the short to long term. The following highlight the scale of the issue:
- According to a report from the UN, 70% of deaths worldwide can be attributed to lifestyle diseases, such as heart disease and diabetes.
- The World Economic Forum has cautioned that the majority of US citizens will outlive their retirement savings.
Demand for mental health services is at an all-time high and this trend is likely to continue for the foreseeable future. This series of papers will consider how Financial Services (FS) firms can intervene and address these challenges.
Our Health and Wellness Series
FS firms have access to vast and ever-increasing amounts of customer data. However, many of them are missing the opportunity to use these data to improve the physical, mental and financial health and wellbeing of their customers. In addition, they could well be missing out on the potential to increase customer loyalty, improve their understanding of their customers and generate higher financial returns.Over the next few months, Evolution Partners will look at what FS firms are currently doing, as well as what they could be doing better in terms of Health and Wellness. This month we will be focusing on Physical Health, and will look at how FS firms can not only look to improve the long-term health of their customers, but also potentially improve retention, engagement and sales. Several insurance firms, more specifically those that offer life and health insurance products, have invested in Health and Wellness solutions for some time. This has had a demonstrably positive impact on customers and their health. For example, one large insurance firm that our consultants at Evolution Partners have worked closely with found that:
While this demonstrates correlation and not necessarily causation, it is reasonable to conclude that participation in the platform was a factor in these improvements given the large sample size (1 million).
- 1 in 5 participants moved from an unhealthy BMI to a healthy BMI
- 1 in 3 participants moved from an unhealthy cholesterol range to a healthier cholesterol range
- 1 in 2 participants moved from unhealthy to healthy blood pressure range
As well as benefiting customers, we have also seen our clients, and companies operating in this space, enjoy a number of additional advantages. One major insurer we work with found the sales rate for insurance products for participants in their Health and Wellness platform was 11 times higher than non-participants. In another example, a life insurance firm our consultants worked with saw their repurchase rates improve by over 50%, versus those who were not in the program. Furthermore, those at higher engagement levels on the platform had repurchase rates in excess of 100%. Again, we cannot rule out factors beyond platform participation as drivers of these, but it seems unlikely that participation had little to no influence. Based on our view of the market and the nascent evidence, it seems clear that investment in Health and Wellness by financial services firms is set to continue. As many organisations are becoming more “purpose led”, improving the health of customers while simultaneously benefitting reputationally and financially is already the approach being taken by firms who have the data, funding and willpower.