In The Spotlight

Redrawing The Life Insurance Roadmap

How Covid-19 helped John Hancock reimagine the scope of its Vitality initiative, transforming the shared-value business model

by Brooks Tingle

Mr. Tingle is President and CEO, John Hancock Insurance. Boston, Ma. Please visit www. johnhancock.com

The Covid-19 pandemic continues to bring attention to how tenuous personal health and finances can be. It has prompted more people to think about their own mortality and whether their families are prepared if something should happen to them.

This is an especially important consideration here in the United States, where there has been a significant increase in lifestyle diseases, heightening the risk factors for contracting severe and often fatal cases of the virus. Its ongoing impact serves as yet another reminder that when it comes to our health and finances, proactivity and preventative measures can be among the best ways to promote positive outcomes.

For life insurers, the pandemic has elevated public awareness of the enduring value our solutions can offer. But the fact is, any time is a good time to get life insurance, because uncertainty is a hallmark of our daily lives. At John Hancock, we believe that in addition to our role in helping customers plan, prepare and protect, carriers should also help customers live longer, healthier lives. Our industry is in a unique position to do this because our customer relationships often span a lifetime, and it’s incumbent upon us to make every year of that relationship meaningful and valuable.

Life Insurance Reimagined

This was the driving philosophy behind our decision to launch the John Hancock Vitality Program. In 2015, we combined life insurance with a technology-enabled wellness program that provides education, support, incentives and rewards designed to support customers’ overall well-being. Using behavioral science, John Hancock Vitality rewards healthy steps individuals take every day, like exercising, getting annual health screenings, staying tobacco-free, purchasing healthy food, and practicing meditation and good sleep habits, enabling customers to earn potential premium savings and discounts from Amazon, REI, Hotels.com and fitness brands Fitbit, Polar, and Garmin.

We reimagined the life insurance model. It was a chance to expand the limits of shared value within our industry – offering new benefits to our customers, our partners, our business and society in general. Five years since its launch, we offer John Hancock Vitality on every policy we sell. We believe it is the right thing to do and we’ve seen the positive impact the program is having on our customers’ lives.

John Hancock Vitality members are highly engaged, staying active and improving their health. A recent analysis of member engagement found:

  • 76 percent are tracking their physical activity
  • 50 percent have reported BMI reductions
  • 40 percent have reduced their Vitality Age, decreasing the gap relative to their chronological age

We’ve also seen how producers selling products with John Hancock Vitality are outpacing the industry in sales by 20 percent and have a customer satisfaction rate that’s 16 percent higher than the industry average. [2],[3]

The Lasting Impact of Covid-19

These findings speak to the efficacy of the program and the benefits of embracing shared value as a business model. They also reveal the growing emphasis on engaging, digital solutions in the life insurance industry — a trend that was already underway, albeit at a slower pace, only to be accelerated by the pandemic. Earlier this year, the industry suddenly found many of its traditional sales and underwriting practices impractical, if not impossible, creating something of an inflection point and necessitating a faster transformation that put increased focus on how we can better serve our sales partners and our customers in an all-virtual world.

The pandemic and the restraints it put on our society will eventually subside, but the advances we’ve made in recent months to further our digital capabilities should not. The years ahead will undoubtedly bring increased competition from non-traditional sources, as well as growing demand among consumers for accessible, engaging digital tools. It is essential that we sustain the strides we’ve made this year and continue to put forth all our efforts to meet consumers where they are, with the protection they need.

Here’s a look at some of the most significant ways we’ve changed and a glimpse at where we may be headed.

Radically Simplifying the Purchase Process

One encouraging sign we’ve seen from our industry over the past several months is with respect to the application and underwriting process. What we historically put customers through to buy life insurance was time consuming and invasive; the required steps amounted to what was probably one of the hardest products to buy in the modern economy. This did not help our reputation in the ever-evolving digital world where “one-click” purchasing has become the norm, but we are working to fix that and have made some good progress.

The fact is, any time is a good time to get life insurance, because uncertainty is a hallmark of our daily lives...

The pandemic challenged some of our most deeply entrenched ways of conducting business – such as doctor’s visits, in-person meetings and a lot of paperwork – and created opportunities to reimagine what processes suited for the decades ahead could, and should, look like. As part of our promise to make decisions easier and lives better, John Hancock launched the JH eApp, which enabled the entire application process to be done digitally and accelerated the underwriting decision time by as much as 20 days. Additionally, in some cases, we are now leveraging patient portals and electronic health records, further reducing our reliance on some of the most cumbersome and time-consuming steps in the application process.

We as an industry must forge ahead even after the pandemic ebbs. Continued modernization is better for our customers, our sales partners and for us. It’s just a better way to do business and you can anticipate seeing these trends continue in the right (forward) direction.

Creating More Meaningful Ownership Experiences

Some of the earliest and most consistent data we’ve seen this year related to Covid-19 speaks to the correlation between baseline health and virus outcomes. Quite simply, the better your health when you contract the virus, the better the likely outcome. And that is amplified for people with pre-existing health conditions who are at increased risk for Covid-related complications, including death. People are taking note and taking action to improve or preserve their health.

The learnings and consequences of the ongoing pandemic have only reaffirmed our belief that life insurance carriers can and should help customers live longer, healthier lives through meaningful and engaging solutions. That’s the foundation of John Hancock Vitality and John Hancock Aspire — the only life insurance designed for people living with diabetes. They represent two of the most significant ways we are bringing the opportunity for long-term health benefits and value to our policyholders. And we are constantly enhancing the program, expanding our network to include the newest technology and personal health innovations. Just recently, we became the first life insurer to integrate with Amazon Halo, giving our customers another tool to gain greater insights into how their daily activities impact their health.

Innovative technologies like Amazon Halo and the Apple Watch Series 6 and Apple Watch SE are just the latest complements to our John Hancock Vitality and Aspire solutions, and we believe incorporating these digital tools represents a significant piece of the future of the life insurance model. Modern consumers’ desire for digital, fast and convenient products and services is reflected everywhere in the global economy, and this momentum will only continue to build. To stay relevant, our industry needs to innovate and deliver new offerings that enable customers to derive new sources of value from their life insurance – helping them plan for when they are gone while simultaneously helping them live well every day.

Looking Ahead

These trends tell the story of an evolving marketplace with incredible potential that is predicated on embracing and then doubling down on digital solutions. Most importantly, behind this story are the customers, prospective customers and their dependents who want and need our tools and services. It’s the potential to reach and serve them that motivates us to continue to improve and deliver new solutions with the potential to make tangible differences in their lives.

There was no way to foresee all that 2020 had in store for us and we are ever mindful of the toll the pandemic has taken across our communities. On the business side, there have been uncertainties and hurdles at every turn, but through strategic navigation and a lot of learning, I believe we’ve refined a strong roadmap for the future.

 

 

 

1.Findings based on John Hancock’s proprietary “Healthy Outcomes data” for Vitality’s five-year proof points, published on September 2, 2020. Based on logged activity through a phone or wearable for registered Vitality PLUS members as of year-end 2019.
2. Based on year-over-year growth of LIMRA sales of John Hancock life insurance products with Vitality compared to Industry, as reported 2016-2019
3. Based on Medallia Survey of JHV PLUS Brokerage Members December 2019-May 2020 as compared to ACSI, LLC. Finance, Insurance and Health Care Report Nov. 2019
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