Insurers Turn to Behavioural Economics to Attract Fitter Customers

December 16, 2015| By Ross Campbell | Life | English

People will alter their behaviour if they see that it will bring them direct positive benefits. This contention reflects the essential principle of behavioral economics, which holds that consumers are open to influence and incentive, not just economic thoughts, when making buying choices. In keeping with this thinking, insurance programmes that reward healthy lifestyles appeal to consumers’ personal perception about themselves as fit and healthy. Those with unhealthy profiles are likely to look elsewhere when a carrier’s products don’t cater to their needs.

Today some insurers provide wearable fitness devices so policyholders can track their physical activity. The data obtained from the wearables is used to reward physical activity with lower rates to encourage policyholders to exercise. The greater the engagement the higher reward potential. For the insurer this translates to lower claims as already healthy customers get even fitter.

Selecting people with active lives isn’t without justification for insurers; individuals’ health behaviours reflect their risk in a dynamic way. After all, it is well known that people who maintain adequate levels of exercise are less likely to die from cardiovascular disease and have a lower all-cause mortality rate.1

The WHO recommends 150 minutes activity of moderate-intensity, which it identifies as “games, sport or planned exercise,” every week for adults in order to improve their cardiorespiratory and muscular fitness, increase their bone health, and reduce their risk of non-communicable disease and depression.2 While playing sports increases aerobic fitness and benefits our health and well-being, physical inactivity adds to poor health by increasing the risk of major non-communicable diseases, including heart disease, diabetes, breast cancer and colon cancer.

People may know that playing sports has a positive impact on health, but many remain physically inactive. In fact exercise levels are falling worldwide.3 The resulting “global pandemic” of physical inactivity is now the world’s fourth leading cause of mortality.4

Physical inactivity accounts for 6% of the 36 million deaths caused by non-communicable diseases every year - significant when you consider tobacco is responsible for 9%.5 Physical inactivity also causes 6% of the worldwide incidence of coronary heart disease; 7% of diabetes, and 10% of breast and colon cancer.

Furthermore, failing to exercise for at least 15 minutes every day increases the risk of heart disease, diabetes and stroke by 20% to 30%; it can shorten someone’s life by three to five years.6 Low cardiorespiratory fitness is a strong independent predictor of cardiovascular and all-cause mortality.The statistics suggest that more than 1.3 million deaths would be prevented if physical inactivity were reduced by 25%.8

Policymakers are facing a dilemma on how to successfully get the positive message across that an active life is a healthy one. Or they can try applying another psychological principle - motivation by fear - and stress the harms of inactivity, rather than the benefits of exercise, to encourage more people to be physically active.9 But getting people to act and get involved in regular exercise isn’t easy. Social factors, along with peoples’ attitudes and beliefs about exercise, limit participation and opportunity.10

Meanwhile, insurers can attract customers that identify with insurance programmes that reward a hands-on approach to fitness and health - they will simply be responding to the persuasive powers of behavioral economics.


  1. Blair S et al.; “Changes in physical fitness and all-cause mortality – a prospective study of healthy and unhealthy men” JAMA 1995:273:1093-1098.
  2. WHO Global recommendations on physical activity for health (2010).
  3. Tully M, Hunter R. (2014); “Importance of doing regular physical activity to health, society and the economy: time for a major re-think” UKCRC Centre of excellence for Public health Northern Ireland.
  4. Kohl HW et al. (2012) The pandemic of physical inactivity: global action for public health. Lancet 2012;380(9838):294-305.
  5. Global health risks: mortality and burden of disease attributable to selected major risks Geneva, World Health Organization, 2009.
  6. Wen CP, Wai JP, Tsai MK, et al.; Minimum amount of physical activity for reduced mortality and extended life expectancy: a prospective cohort study. Lancet 2011; 378: 1244–53.
  7. Wei M et al.; “Relationship between low cardiorespiratory fitness and mortality in normal-weight, overweight and obese men” JAMA 1999:282(16):1547-53.
  8. Lee IM, Shiroma EJ, Lobelo F, Puska P, Blair SN, Katzmarzyk PT; Effect of physical inactivity on major non-communicable diseases worldwide: an analysis of burden of disease and life expectancy. Lancet 2012;380(9838):219–29.
  9. Chi Pang Wen, Xifeng Wu.; Stressing harms of physical inactivity to promote exercise Lancet 2012; published online July 18.
  10. Bauman AE, Reis RS, Sallis JF, Wells JC, Loos RJ, Martin BW; Lancet Physical Activity Series Working Group. Correlates of physical activity: why are some people physically active and others not? Lancet 2012;380(9838):258-71.


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