Catalysing Behaviour Change #2
Why better client engagement is good for everyone
Next in our Catalysing Behaviour Change series, Lara Fascione, Vitality Group Retention & Adviser Operations Director explores how harnessing the power of engagement can deliver benefits for clients and advisers alike.
Consumer expectations have changed considerably in recent years. We’ve seen digitisation improving access, increased personalisation and rising demand for experience-based offerings that deliver meaningful engagement1.
Given all this, insurance products also need to evolve to remain relevant. With this comes better client outcomes, which is also good for advisers and the industry as a whole.
The need for better client engagement
Traditionally, insurance products have been extremely transactional in nature, with limited tangible value and few opportunities for meaningful engagement.
In providing little more than the promise of financial compensation in the event of a claim, most clients generally treat traditional insurance as something they ‘file away in a drawer and forget about’.
The drawback of this approach is that clients don’t see the value in the cover they have. It’s either forgotten about, or worse still, regarded as an unnecessary expense that’s providing them with no tangible benefits.
As we explored recently, we know that it’s hard to change clients’ behavioural biases and overconfidence in their health and wellbeing. The ‘peace of mind’ of simply being insured won’t necessarily cut it.
Instead, we can apply the theory of behavioural economics to a programme of benefits and rewards linked to insurance, that harnesses client engagement to drive better long-term client and adviser outcomes.
Regular touchpoints and seamless integration into a client’s life
The key to driving better engagement is offering regular and ongoing touchpoints that are genuinely valuable to the client. This needs to happen almost immediately – from the very start of their plan going live, and the more this can seamlessly integrate into their lifestyle, the better.
The Vitality Programme – the world’s largest health promotion programme linked to insurance – is driven by behavioural economics and comprises of a compelling set of incentivised tools and rewards accessed through a series of intuitive digital journeys accessed via an app.
As Andy Walton, Protection Proposition Director at Mortgage Advice Bureau says: “There’s a very engaging app that should help people keep their health in the front of their minds, whilst having visibility of the benefits the Vitality Programme gives them, and having instant access to their core benefits and sight of what they’re covered for.”
Whether it’s redeeming a coffee reward, visiting the gym or completing a health review, these day-to-day touchpoints help to foster a stronger relationship with the client, whilst also helping them to live a healthier life.
The evidence highlights how effective this approach is, with the Vitality programme delivering 10 times greater engagement than comparable health and wellbeing interventions. Vitality members log over 2.2 million app session per month and redeem on average over 45,000 rewards each week2.
Immediate value from day one
The power of this engagement in turn leads to the delivery of real tangible value for the client, immediately from day one of their plan, rather than merely at the point of claim.
Along with the benefits of health improvement, we return significant monetary value to members who engage in the Vitality Programme. This comes both in the form of lower insurance premiums and tangible rewards, helping clients to save money on the things they want.
Through this shared-value mechanism, we returned more than £100 million to our members in 2022 alone and at an individual level, these savings go a long way in today’s cost of living crisis3.
Improved persistency
Whilst driving engagement helps to deliver significant benefits for clients, the benefits for advisers can be just as significant.
In providing more than just a transactional approach to insurance and creating a stronger long-term relationship with the client, where the value of cover is recognised on a daily basis, we can help to drive improved persistency.
Andy Walton agrees. “Having the right level of engagement is really important from a persistency perspective and all being well the client sees that value on a more ongoing basis.”
Our own experience demonstrates that more engaged members are less likely to cancel their plan, with our highly engaged Platinum members 39% less likely to lapse their cover4.
More regular engagement can also serve to strengthen the relationship an adviser has with their client and in Walton’s view, additional areas of engagement like the Vitality Programme “help an adviser to engage with their client in a softer sense. They’re not just talking about sums assured and product, instead they’re talking about extra benefits and value the client gets.”
This not only provides more opportunities for referral and cross-sell business, but ensures the adviser continues on a journey with the client. This is particularly important in light of Consumer Duty and the need for products and advice to remain suitable for the client’s over the longer term.
In addition to this, through harnessing the power of engagement we can help clients to live in better health, while also helping to ensure they’re insured, plus return more immediate value to them through numerous rewards and partners. These day-to-day touchpoints and meaningful interactions – a key component of the next generation of insurance – in turn help to deliver exceptional retention rates, which is invaluable to advisers. It’s a win-win for all.Where to next?
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Protection must evolve to meet changing customer needs
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The advent of the new Consumer Duty regulations means that protection products must evolve to meet changing consumer needs and deliver good outcomes, writes Justin Taurog, Managing Director VitalityLife.
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People are generally over-confident when it comes to their health, making meaningful lifestyle change is an uphill struggle. The answer to this lies in behavioural economics.
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2 Vitality engagement data, 2023
3 VitalityLife Claims and Benefits Report 2023
4 VitalityLife Claims and Benefits Report 2023