Time for insurance companies to find creative and profitable ways of incentivising healthy lifestyles
As we get wealthier as a society, the typical adult male is engaging in fewer hours of physical activity leading a society of sedentary individuals, vulnerable to a number of chronic, debilitating lifestyle diseases. Another consequence of our opulence is that more of us will have insurance cover, so the burden of health coverage for the sometimes exorbitant bills these conditions can generate will increasingly fall on insurance companies, adding yet another worrisome headache in a field already notorious for being unpredictable in terms of returns. For the patients, in addition to the needless and often avoidable suffering, there is the real possibility that they may exceed their cover, meaning that they have to pay out of their own pocket to receive private care or transfer to public institutions and risk suboptimal facilities.
Health of bones and joints
Musculoskeletal disorders, such as back pain, arthritis, and osteoporosis, are leading causes of disability worldwide. These conditions are painful, costly, and require long-term treatment in the form of medications, rehabilitation services and occasionally surgery. Physical activity, particularly aerobic drills, strength training and weight-bearing exercises, plays a critical role in maintaining and improving musculoskeletal health. Regular exercise increases bone density, enhances joint function, and improves muscle power, which collectively contribute to reducing the risk of injury and degeneration over time.
Chronic Diseases
Beyond musculoskeletal health, regular physical activity combined with a healthy diet is one of the most effective tools for preventing diseases such as heart disease, diabetes, and hypertension. The excessive sugar, salt and preservatives in processed foods, marketed as fashionable, quick and tasty treats, lures many down a slippery path, already precarious because of lack of physical activity. On top of this, with demands for higher profits and cutthroat competition for jobs, as well as strained social cohesion especially in large cities, many working people are battling stress, anxiety and depression. These mental health issues are rising concerns globally, contributing to substantial healthcare costs due to therapy, medications, and lost productivity.
The aforementioned chronic conditions are strongly linked to sedentary lifestyles and poor dietary habits, and represent a substantial portion of healthcare spending which, as patients are getting diagnosed earlier in their lives and generally living longer, is set to increase in the decades to come.
What can we do?
Active individuals are at a lower risk of developing these diseases, which should make concerned individuals see movement as a form of medicine and an investment in their current and future wellbeing. Any form of safe exercise is better than nothing, but a plan should be made to gradually reach optimal levels, adjusted for age and ability.
In addition to its physical health benefits, regular exercise also has a profound impact on mental health. Exercise is known to reduce symptoms of anxiety and depression, improve mood, and enhance cognitive function, leading to overall improvement in job productivity and life satisfaction.
Where insurance companies come in
Incentivising physical activity is a smart financial decision for insurance companies. It is no secret that profit margins in the industry are slim, and any legitimate measure to reduce payouts should be keenly explored. By encouraging customers to maintain good health, they will be seen to genuinely care about their clients and be an integral part of the team helping them maintain good health, which will generate incalculable goodwill.
From a cost perspective, prevention is always more economical than treatment. For instance, the cost of managing diabetes or cardiovascular disease can be immense due to the need for continuous medication, regular check-ups, and potential hospitalizations. Promoting regular exercise as part of their wellness programs can significantly lower the long-term costs associated with musculoskeletal disorders and other chronic conditions. By encouraging policyholders to remain active, insurers can help prevent these conditions from developing or worsening.
Incentives such as premium discounts, rewards programs, or subsidised gym memberships can be powerful motivators for individuals to incorporate regular exercise into their routines, and these discounts, marketed appropriately in the relevant spheres, can be a magnet for already fit persons looking to gain some fiscal rewards for all the effort they have put in at the gym. They will see their sweat literally turn into shillings, and it won’t be long before all their friends want to join them in the attractive schemes that give commensurate rewards for the hours put in. One simple metric that insurance companies can use is the body mass index (BMI), a ratio of weight to height, which, if within certain parameters, could form the basis for inclusion.
By promoting active lifestyles through incentives like lower premiums or health savings contributions, insurance companies can help their members avoid debilitating and expensive conditions, reducing claims and also increasing the healthy lifespan of paying policyholders – an attractive long-term outcome for both parties. As part of a mental health intervention, insurance companies’ drive for healthy diet and regular exercise will boost psychological well-being which in turn can lead to fewer doctor visits, less medication, and improved productivity.
Conclusion
Incentivising healthy and active lifestyles is a mutually beneficial strategy for both insurance companies and policyholders. From enhancing musculoskeletal health and preventing chronic diseases to improving mental well-being, regular physical activity has a positive impact on overall health. For insurance companies, encouraging such habits translates into lower healthcare costs and a healthier, more engaged customer base. Packaged correctly, it can also be an effective marketing tool particularly to the already active population. Through well designed programs that reward policyholders for maintaining active and healthy lifestyles, insurers can not only reduce claims but more importantly promote a culture of health that ultimately benefits society as a whole.
Ⓒ CWO, MMXXIV
