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Healthy habits will lower our insurance premium or is it not that simple?


Have you ever tried one of those devices that track and assess your driving style to lower your car insurance premium? Now there is something similar for life insurance. Vitality - a South-Africa based company - has partnered with insurers John Hancock in the US and Manulife in Canada to monitor your healthy behavior. In return, you'll get a discount on your life insurance and additional rewards. The platform tracks your vitals and behavior through wearables like the Apple Watch or Fitbit. The more healthy behavior you log, the more points you collect towards earning your discount. It works for individuals and for group benefits. It sounds simple enough, no?


Manulife awards a discount on your insurance if you exhibit enough healthy behavior. But is it really that simple?

Employers are using this type of wellness program in an attempt to make their employees healthier, boost productivity, and lower healthcare spending and it seems to be having an impact. Ericsson and Baylor College of Medicine have both reported improved physical activity and dietary habits as well as lower healthcare spending for the employees who subscribed to their program. As more and more organizations understand the importance of employee wellbeing, this type of real-time behavior monitoring will become much more widespread.


However, there is one big gap in these employee wellbeing programs: the environment we live in and work in and our socio-economic situation defines our wellbeing as much as our behavior does. What air and sound pollution levels do I get exposed to every day? How long is my daily commute and am I driving or can I walk or cycle to work? Can I buy fresh produce within one mile of my work or my home? Are there places around where I can enjoy a conversation or activity with a colleague, a friend? About 70% of what impacts our health & wellbeing is linked to our lifestyle and the environment we live in. When we think about wellbeing as just body or behavior, we are not tapping into the full potential for improvement.

The big gap in employee wellbeing programs: the environment we live and work in, also beyond the office.

Most corporate wellness programs incentivize people to behave differently. As long as we eat well, exercise, and go for regular preventative check-ups, our health and wellbeing will improve. We just have to stick with the program. That seems to be the general attitude when it comes to employee wellbeing. However, this means that corporations are missing out on capturing the full potential impact of their investment. We also need to look at how the building, the campus, and the broader neighborhood could support that healthy behavior.


Facebook has understood this very well. Its Menlo Park campus in California is a great example of how you can approach body, behavior, and environment at the same time. Facebook’s office and the campus have been transformed into a miniature city that has committed to alternative forms of transportation for its employees through a fleet of bikes and bike-share programs. Additionally, showers, bike racks, lockers, safe cycling workshops, onsite bike repair, and safe, attractive cycling routes inside the campus are also available to employees as a way to encourage employee wellness through encouraging physical exercise. Employees can drop their bikes off at the servicing hub, which is located in the middle of the campus and pick them up before they commute home. Their campus is actually designed to support all aspects of an active lifestyle. This is the only way we can truly change habits and make them last.


No worries though, you don’t need a campus the size of a small city to make this happen. This approach can also work on a much smaller building scale. We just need to ask ourselves how the work environment is stimulating healthy behavior, how it is potentially influencing employee wellbeing, and where might it be interfering with our good intentions? For example, what happens when someone arrives at our building by bike? What obstacles do they encounter? How can we make this an easy and pleasant experience and encourage it?

For companies, this environment blindspot mainly results in underutilized investment. However, when we build it into a system that will define insurance premiums in the future, it becomes a whole different story. We are potentially creating a system where the insurance premium you pay is more impacted by where you live or work than by any type of healthy behavior. Let’s go back to Baylor College of Medicine for a moment. They are located in a district that has no cycling infrastructure and is heavily car-focused. This means that employees lose their opportunity for daily exercise while commuting to work. So they will have to dedicate extra time to it after work. Imagine how the company's current recorded gains might improve if walking or cycling to work was easy and highly encouraged?


Someone living in a neighborhood with very low walkability and no public green space will have a much harder time getting some physical activity into their daily routine than someone who lives in a dense urban neighborhood where they can walk or cycle to work, the grocery store, school, or daycare. These urbanites will reach a few thousand steps on a daily basis without even having to make separate time for a workout or without having set foot in a gym. The system might benefit people who already have a healthier lifestyle because they can afford to live in a healthy neighborhood. When my neighborhood or my workplace does not provide that, it becomes a much more difficult story with potentially higher insurance costs than before. When more insurance companies switch to a performance-based premium system, they should include the built environment as an integral part of this approach.


Corporate wellness programs and performance-based insurance are an interesting trend. They have the potential to help lower chronic diseases but only if we take the full picture approach: body, behavior, AND environment. How are you supporting your employees’ health and wellbeing today?


Co-authors: Gintare Norkunaite (PosadMaxwan) and Maddy Luker (researcher).

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