Meet Susan, a member of Discovery Health’s Vitality programme, a reward-based scheme bundled with her life insurance policy. When Susan’s health activity is recorded (for example, if she goes to the gym), she earns points that determine her Vitality status. As her Vitality status improves, she can access increasing discounts for leisure and travel activities. As part of the Active Rewards component, Susan can also earn vouchers for coffees or smoothies if she achieves weekly activity goals. In this “shared value” programme everyone wins: Susan is fitter, Discovery’s insurance risk is lowered and the local coffee shop is selling more (decaffeinated) coffee. If all Discovery members are as diligent as Susan, the insured group should be healthier, improving health outcomes, and Susan’s friends may be even inspired to buy a policy too (driving scale for the insurer).
Originating in South Africa, the Vitality programme has been a global success. So far such solutions have largely targeted middle- and upper-income consumers in developed markets. Nevertheless, they are prompting reflection in the microinsurance community: could reward-based schemes, such as Vitality, be applied to the low-income market? Are there any such examples with microinsurance? What is the potential to drive scale and improve health outcomes? This was the topic of the MiN Expert Forum earlier this year. On the panel was Dr. Thomas Brennan (Discovery Health, South Africa), Iulian Circo (Triggerise, South Africa), Barbara Chesire-Chabbaga (AB Consultants, Kenya) and Gayathri Sakthirajan (DHAN Foundation, India).
Behavioural economics applies to everyone
Vitality brings together behavioural economics, micro-incentives and gamification with insurance and other financial services. According to their experience, by rewarding health seeking activities, it is possible to change the way people behave and therefore have an impact on health outcomes. While Vitality has targeted middle- and upper-income markets, Brennan argued that there is nothing stopping the application of the theory to the low-income market. Sakthirajan agreed, seeing the relevance of a programme like Vitality in India. A low-cost Vitality model has recently been launched in China, based purely on step-count data. Whilst the programme in its current format is unlikely to be the right reward scheme add-on for microinsurance, it is interesting to see how Vitality is being adapted to different markets.
Triggerise – reward platforms aimed at the low-income market to drive social impact
In contrast to Vitality, an organisation applying a similar idea purely for the low-income market is Triggerise, a not-for-profit development organisation operating in 12 markets in Sub-Saharan Africa and India. Triggerise believes that people should be “rewarded for doing the right thing” and that rewarding people is an efficient way of driving social impact.
Triggerise has developed a number of Vitality-like reward platforms to drive healthier outcomes. One example is “Tiko Saathi”, a prepaid pregnancy insurance scheme in India. For INR 500 (around USD 7.80) members are guided through their pregnancy. Each time a milestone is reached, such as going to an antenatal visit, the member is rewarded with Tiko points. Extra Tiko points are awarded if milestones are reached in a particular timeframe. If all milestones are reached, then the member is entitled to a free delivery, even if it is a C-section. Tiko points can also be redeemed at participating shops and service providers for items such as vitamins, healthy food and even at selected hair salons.
In Kenya, Triggerise is collaborating with Mtiba, a joint venture between the PharmAccess Foundation and Safaricom. Mtiba is a platform offering a savings wallet earmarked for health which also acts as a channel for enrolment to Kenya’s National Hospital Insurance Scheme (NHIS). Mtiba’s health wallet was launched in July 2016 – within a year almost 1 million members had signed up. Chesire-Chabbaga suggested that there is no reason why reward schemes incentivising healthy behaviour could not also be bundled with other financial services in Kenya, such as those offered through SACCOS (savings and credit cooperatives).
According to Circo, the Triggerise reward model is far more than just a platform; financial ecosystems are created through this model, bringing together members, health care providers, participating shops and others. Furthermore, through exchanging points, a large number of microtransactions are essentially converted to a batch of transactions, bypassing the cost of individual transactions. In the future, such models could also utilise Blockchain technology, which offers the potential for community-level decentralised platforms and the processing of large volumes of payments at low or no cost.
There is ample evidence that by rewarding people, their behaviour can be changed. Vitality’s success across the globe shows that reward-based programmes fit well with insurance. The panel agreed that Vitality-like schemes could be adapted to the low-income market, with the potential to drive both scale and improve health outcomes. I agree. In my opinion, conducting thorough market research would be a very important first step to ensure that the health activities defined and rewards offered are appropriate and appealing to the low-income consumer. These insights would be invaluable in designing impactful reward schemes.
There is great potential for innovation in this area. Perhaps you have ideas and want to continue the discussion. If so, you are invited to become a member of the Network and join the MiN's Best Practice Group on Health and Financial Inclusion by clicking on the blue button at the top of the blog.
Blog by Lisa Morgan, Health Actuary and Technical Officer at the ILO’s Impact Insurance Facility, which enables the insurance industry, governments, and their partners to realise the potential of insurance for economic and social development.
View the presentation slides and download the full recording of the Expert Form here.