Written by Jane J. Wang, CEO Optimity
(5 min read)
How Optimity’s Health Grade Drives Policyholder Engagement and Promotes Healthier Living
The concept of combining a number of data points to calculate a score that denotes an individual’s risk level has been around for many years. The FICO score was first introduced in 1989 and is now leveraged by banks, mortgage lenders and many other institutions.
It’s certainly not a foreign concept in the insurance world, either. Collecting and weighing many data points and factors is an oversimplified synopsis of insurance underwriting. And in recent years, we’ve seen insurance companies leverage technology to push the boundaries of traditional underwriting to bring in new data points to better evaluate an individual’s risk.
Root Insurance, an InsurTech car insurance company founded in 2015, built its business model on this idea. In its words, it’s driving the FinTech revolution by creating powerful insurance products and technology platforms that rewrite the rules for today’s world, promoting fairness, simplicity, and personalization. By having prospective policyholders complete a test-drive period, it weighs an individual’s driving score as the No. 1 factor in the underwriting process, over other traditional components such as age, zip code and credit score.
At Optimity, we’ve been iterating on our own score in the life and health space for the past five years. This score — the Optimity Health Grade — takes a combination of traditional factors used in the life insurance underwriting process and combines it with other lifestyle qualities and novel factors that are excellent predictors of mortality.
We take the typical information (age, gender, height, weight) along with traditional factors such as an individual’s smoking and drinking behavior and their history of chronic disease, and then a series of other lifestyle components such as step count, sleep and stress.
When it comes to step counts, we have one of the largest data sets out there. Last year, we collected more than 2 trillion for overall step count information. This strong correlation to activity level is just one of the many ways that the Optimity Health Grade provides a holistic view of a user.
Using behavioral science and nudges to promote healthy living
Optimity leverages gamification within our app to promote user engagement. Our users can earn points, redeem rewards and enter raffles. But our approach to gamification goes beyond what many think of when they think of gamification apps. We’ve found that there is a sense of fatigue associated with just providing points or badges when a user completes an activity or goal.
To drive a deeper level of engagement and loyalty, we promote microlearning within the app. We ask users questions in the app that subtly instills a curiosity factor and encourages them to think more about things like their eating habits and their daily activities. This core aspect of behavioral science not only leads to more engaged users, it also helps policyholders achieve better results on their Optimity Health Grade.
One of the questions we ask in the app is which one is healthier for you: table salt or sea salt? Providing users with the answer — that both salts are about the same — is really only a small part of it the microeducation. After displaying the answer, we reveal additional details about the answer and explain why that’s the case.
By repeating this approach over time, we can begin to nudge the behavior and thinking of users. Without deliberately asking them to cut out certain foods from their diet or begin to incorporate new exercise into their routine, this behavioral science approach actually leads to the user taking those actions themselves.
While this approach may not work for 100% of users, we’ve seen that people want to learn and they are willing to change their habits to improve their score. There are, of course, aspects of the Optimity Health Grade that users can’t control. No matter how much we nudge an individual, they can’t become younger, and they can’t change their family’s health history. But people are willing, eager even, to take action on things like their step count or their drinking habits that can have a really positive impact on their future health.
Improving policyholder engagement and encouraging healthier habits
In today’s digital age, insurance companies have a golden opportunity to engage with policyholders in ways they never have been able to before. At Optimity, we’ve seen the changes that individuals can make when they’re engaged in gamification and microlearning.
Consider who you’d prefer to have as a policyholder: someone who only has a point-in-time reference for their insurability and isn’t actively working to improve their habits or someone who you’re actively educating and watching them show their desire to improve their lifestyle.
The latter amounts to the policyholder that every insurer should be seeking. The traditional factors will always play a key role in the underwriting and insurability process, but where insurance companies can really separate themselves is by encouraging their policyholders to become their best selves. We want to help you achieve that.
To learn more about the Optimity Health Grade and how can you improve engagement with your policyholders, visit our policyholder engagement page.