Life insurance is arguably where the biggest tech changes are still to take place. For decades it’s been a fit-and-forget insurance product, but new players are entering the market, determined to shake up the old order and offer consumers something much more than a dusty old document.
Insurance Edge caught up with reviti founder and CEO Daniel Pender.
IE; These are interesting times aren’t they, what are the big changes now within insurance Dan?
DP; There’s definitely no going back to the old 8-6 office life is there? Those days are gone and I think everyone knows we have to find new ways of working, where a three hours a day commuting battle isn’t part of the deal. What Direct Line has done regarding employee choice on location is very significant and it will become a default industry position.
The way that every company has coped with Covid-19 is amazing, but there are still some major steps forward in terms of technology and how its used. The pandemic has concentrated minds on the future, the old ways don’t really work anymore.
IE; That brings us to Life insurance, which has really been a Cinderella sector in the market to an extent, what made you found reviti and try to do things differently?
DP; I spent a lot of years with Zurich and Prudential and one thing that never really changed were the Life rates for smokers being substantially higher than non-smokers. Life policies generally do a good job but I wanted to create something truly brand new, break out of existing Life insurance thinking.
There’s lots of overly legalistic, tick-the-right-boxes terms and conditions in the typical Life product, and I wanted to get away from that, because it makes the product harder to buy than it needs to be. For example, lots of companies ask policyholders to fill in a questionnaire online and then someone phones them up and asks them a series of incredibly personal questions all over again – there has to be a better way.
IE; reviti has a kind of Life coach feel to its website, it’s kind of mentoring smokers to kick the habit.
DP; It is and we do that in a very non-judgemental kind of way. There’s lots of discussion regarding vaping but the fact is that vaping isn’t as bad as smoking cigarettes, so we need to reward ex-smokers and learn more about their lifestyle so we can offer them better Life insurance deals. If you can persuade someone to quit nicotine then their cardio performance starts to increase, their skin looks better, lungs clear – the body begins to repair itself.
You can’t get back to a pristine, never-smoked, health condition perhaps, but you have just taken a major step forward by switching from nicotine to vaping. That’s the essence of what reviti are doing; encouraging better life choices.
IE; Some Life insurance apps are very focused on fitness, activity trackers with targets and points, but reviti is slightly different isn’t it?
DP; There are 120 activities on our app, many of which are about mental health and wellbeing, as much as physical activity. When you sign up you get a coach for the first 2 weeks, so there is immediate support and people need that, because studies have shown that people will listen to advice from their family, friends and doctors, but beyond that they often need a little bit of mentoring to make a major change like quitting smoking for good.
IE; So the key benefits for the policyholder aren’t just cheaper rates, they’re getting emotional support just when they need it?
DP; Exactly. We understand that it is a long road for many smokers and that in the past nicotine has been seen as a binary thing; you smoke, or you don’t smoke – there’s no inbetween. But there IS that inbetween stage called vaping. We have a re-insurer who has provided rates for vapers, so that they’re not being put in the same risk group as smokers. That’s about fairness because vaping is nowhere near as risky to your health as smoking.
IE; How big is this vaping market?
DP; We estimate there are 3.5m vapers in the UK and many are paying smokers rates for Life cover, often because they already have a Life policy active and can’t easily change the status of that policy. So we offer a sliding scale of prices, based on your healthier lifestyle data and this is where our app helps us, and the policyholder alike, because it gathers data on your healthier life as you transition towards quitting. It’s really important for insurers to recognise that commitment by the policyholder and if the data is gathered by the app, everybody wins.
IE; How does the app work in practice then?
DP; It divides your typical day into diet, exercise and mindfulness. It encourages you to pause for a moment each day, take time for yourself. Diet is also very important because there’s potential damage from a high sugar lifestyle of course. You collect points and those help towards funding fresh water projects in the developing world, so you feel part of something that’s bigger than yourself – you’re making a difference.
IE; More Life products are recognising that people like to do that bit more, not just buy a backstop policy that pays out on their passing aren’t they?
DP; Definitely and in the long run we want to focus on tweaking our app so that it can work with people changing their lives to cope with diabetes or other health conditions. There’s so much potential in helping people have a better quality of life within the life insurance market. In the past we tended to focus on the mortality aspect a bit too much and miss out on the overall health benefits, the bigger picture.
Stopping smoking is probably the biggest change you can make in improving your quality of life, as well as adding potential years to your lifespan. So there are plenty of other reasons for taking out Life cover beyond leaving a lump sum – we can be better people. That’s the extra benefit we can utilise via technology now, and in the future, so that Life insurance offers much more and really becomes part of the policyholders lifestyle, not just an unpleasant task that has to be done. Big difference.
IE; It is, Dan thanks for your time.