How gamification is helping the insurance industry boost sales [Q&A]

New research conducted by The Harris Poll on behalf of SE2 and Life.io finds the vast majority of respondents would opt to share real-time wellness data with insurance companies through wearable devices in exchange for ongoing benefits like a lower insurance premium or wellness rewards.

​The data, based on results from more than 2,000 adults, also finds that people want their policies to be more interactive. Roughly two thirds (68 percent) say if a provider offered a policy that included elements of gamification to reward healthy lifestyle and wellness habits -- like badges for hitting certain milestones, a leaderboard, financial rewards -- they would be likely to engage in those elements.

To find out more we spoke with SE2's CIO, Vinod Kachroo, about these findings and more specifically, the role of gamification and customer experience (CX) in helping life insurers boost sales and better meet customers where they are. SE2 is an industry leader in providing technology-driven third-party administration services focused on the US life and annuity insurance industry, and Life.io is a leading customer engagement platform for insurers.

BN: According to this research roughly 75 percent of adults would opt to share wellness and lifestyle data with life insurers in exchange for rewards. That seems like a lot of people willing to part with their with personal information.

VK: That's right, three quarters of adults are willing to share wellness data like steps walked daily, sleep patterns each night, heart rates, calories burned and blood pressure daily with insurers in exchange for benefits. And in fact, those rewards could lead to lasting lifestyle and health changes. 86 percent of respondents say they'd be much or somewhat more likely to live a healthier lifestyle if a life insurance company offered cash back as an incentive in exchange for their real-time wellness information.

BN: So the insurer collects the data from the insured by having them wear a wearable, like a Fitbit, that they provide as part of the policy?

VK: That's exactly right.

BN: How common are life insurance policies that include wearables these days and are they generally well received?

VK: They've grown notably in popularity over the past couple of years with programs like John Hancock's Vitality, for example, paving the way. These programs are interactive in nature and include digital health and fitness tracking where the data is then given to the life insurer. It helps keeps the insured accountable in making healthier lifestyle choices in exchange for rewards like fitness discounts, financial planning coaching and a lower monthly premium.

We find these kinds of policies are well received because they're opt-in. The insured is never forced to select an interactive policy. It's on their own terms that they're sharing their data.

BN: Can you tell us more about how the gamification of life insurance works?

VK: Gamification is about incorporating techniques derived from games -- think video games, sports, board games -- into the customer experience. By incorporating elements like points, badges and leaderboards, in addition to more sophisticated elements -- like avatars and rewards -- the insured sees a fun and competitive experience versus one that's mundane.

Insurers are starting to gamify elements of the customer experience as we've seen in other industries, from airlines to credit cards, which already have great loyalty programs in place that rely largely on game mechanics. Insurance companies are rewarding users with points and gift cards for completing courses or taking quizzes related to financial wellness and mindfulness, for example.

BN: What about the security implications at play here, don't privacy concerns could arise when you talk about sharing personal data with insurance companies?

VK: It's a fair question, and it's important to point out that for the sake of the type of data we're talking about in our survey (steps walked daily, sleep patterns each night, heart rates, etc), this is opt-in only. The insured don't have to share this data with insurers, they choose to in order to receive benefits and rewards. Therefore, we don't see this as an overstepping of bounds. If at any point the policy holders want to stop sharing this information, they can easily opt out.

BN: Have these connected/wearable-based policies helped insurers in boosting sales?

VK: We believe better engagement, an enhanced customer experience (with more personalization, for example) and ongoing rewards are key parts of the solution. To highlight specific data points from the research that validate this:

• Almost 75 percent of adults would opt to share wellness and lifestyle data with life insurers in exchange for rewards.
• Roughly seventy percent (68 percent) of respondents say if a provider offered a policy that included elements of gamification to reward healthy lifestyle and wellness habits (think: badges for hitting certain milestones, a leaderboard, financial rewards), they would be likely to engage in those elements.
• 65 percent of adults say they would be likely to switch their life insurance provider to a company that could tailor coverage offerings to fit their individual wellness needs.

BN: Life insurance often used to involve a lengthy sales and underwriting process and invasive testing, so it's interesting to see how the industry is evolving digitally. Where does it go next?

VK: In order to future-proof their businesses, insurers will need to digitally evolve to meet the demands of the next generation of insurance consumers. I think we’ll see it becoming more customer centric and leveraging tech more to improve the customer experience. One-size-fits-all no longer works for today’s buyer of anything, including life insurance. So finding ways to tailor the service and truly make that delivery a personalized, engaging experience is going to be critical.

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