Commercial incentives to change behaviour

Transcription

1 Commercial incentives to change behaviour Evidence, Science & Rewards Introduction to Vitality Greg Morris, International Business Development Actuary

2 Building the case for incentivised wellness 1 2 Introduction to Discovery Global backdrop 3 Overview of Vitality 4 Science behind Vitality 5 Studies into efficacy of Vitality programme 6 Healthy Foods programme

3 Ethos of consumerism: focus on the client Integrated Health, Life and Financial Services Group Post 2004 Health Life Financial Services Wellness and consumer engagement Vitality is the foundation of all Discovery s businesses 3

4 Discovery Health Fund South Africa Over 2 million lives covered and 44% market share 2500 Discovery Health lives ( 000) Current market share Rest of market 56% Discovery Health 44% 0 4 Jun-93 Jun-94 Jun-95 Jun-96 Jun-97 Jun-98 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Dec-09

5 Global Vitality Membership 1,800,000 1,600,000 1,400,000 1,200,000 1,000, , , , ,000 0 Jan- 98 Jan- 99 Jan- 00 Jan- 01 Jan- 02 Jan- 03 Jan- 04 Jan- 05 Jan- 06 Jan- 07 Jan- 08 Jan- 09 Jan- 10

6 Discovery s core purpose Core purpose Make people healthier and enhance and protect their lives Manifestation Why is Discovery, a South African firm, paying its customers to get healthy while most Western insurance giants do not? The Economist, 20 February

7 Building the case for incentivised wellness 1 2 Introduction to Discovery Global backdrop 3 Overview of Vitality 4 Science behind Vitality 5 Studies into efficacy of Vitality programme 6 Healthy Foods programme

8 Trends in health and wellness Increasing burden of ill-health, driven primarily by the increase in chronic conditions Projected main causes of burden of disease (DALY s) by World Bank income Group, 2005 Age-standardised DALY s Low income Lower middle income Upper middle income High income World Communicable diseases, maternal and perinatal conditions, nutritional deficiencies Chronic diseases Injuries Source: WHO (2005) Preventing Chronic Disease: A Vital Investment

9 The drivers of morbidity and mortality The Oxford Health Alliance s model Probability of 15 year survival without coronary artery disease, stroke or diabetes 3 Behaviours Smoking No exercise Poor diet 4 Diseases Cancers, Diabetes, Lung disease, Heart disease 15 year survival probability 100% 90% 80% 70% 60% 56% 50% 40% 30% 20% 71% 81% 86% 50% of deaths worldwide Source:1Bradshaw, et al, MRC Policy Brief no 1, March % 0% Male aged 50: overweight smoker Step 1: quit smoking Step 2:get active Step 3: lose weight Source: Lifestyle and 15-year survival free of heart attack, stroke, and diabetes in middleaged British men. Archives of Internal Medicine (1998), SG Wannamethee et al.

10 Why is wellness illusive? Problem of under-consumption of preventive care is one of behavioural economics Benefits are immediate, price is hidden Sickness Benefits are hidden, price is immediate Wellness Under consumption of preventive care Lack of information Over-optimism Hyperbolic discounting True efficacy of different health and wellness approaches is not well understood People tend to overestimate their abilities and health status Future rewards of a healthy lifestyle are significantly undervalued relative to cost today

11 Estimated impact of diseases of lifestyle 700 Estimated number of deaths (million) Cholera 1918 Flu pandemic AIDS (2020) World War II Bubonic plague Puerperal (childbed) fever Smallpox

12 Estimated impact of diseases of lifestyle 700 Estimated number of deaths (million) Cholera 1918 Flu pandemic AIDS (2020) World War II Bubonic plague Puerperal (childbed) fever Smallpox Lifestyle-related deaths * * Estimated deaths over the period

13 The 20 th Century Nutrition Transition Proportion of South Africans that are overweight or obese Processed and energy-dense foods Reduced animal food prices Supermarkets Mass media promoting unhealthy foods Source: Medical Research Council

14 The giants of excess are most readily discernable in healthcare 25 Obesity: percentage of adult population with a BMI>30 kg/m fold increase in obesity levels in the UK in 26 years; 25% of the population obese Source: OECD

15 So how did we get this way?

16 The 20 th Century Portion Distortion

17 Relative degree of intervention capability No obvious wellness champion amongst any of the stakeholders Individual Can take action to improve health and wellbeing, however: 1. Does not shape the workplace 2. Does not see all health-related costs 3. Has a short-term horizon Employer 1. Shapes the workplace 2. Is exposed to the costs of healthcare / cost of absenteeism 3. Longer-term horizon However, cannot intervene in the decisions of individual employees Government 1. Sets the policy environment 2. Bears the brunt of Social costs However, significant separation from both the work environment and individual taxpayer

18 Building the case for incentivised wellness 1 2 Introduction to Discovery Global backdrop 3 Overview of Vitality 4 Science behind Vitality 5 Studies into efficacy of Vitality programme 6 Healthy Foods programme

19 The Discovery healthcare model Insured benefits Full insurance cover for uncontrollable expenditure Severity Medical Savings Account Prudence in discretionary expenditure Vitality Consumer engagement and wellness Frequency 19

20 Medical Savings Account Opportunities Severity / cost Nondiscretionary medical expenses Discretionary medical expenses Large out of pocket spend Cost inflation due to moral hazard Demand for comprehensive cover Health and wellness Tax incentive on health insurance premium Percentage of the population 20

21 Medical Savings Account Member engagement increased use of generics over branded drugs 70% 60% 50% % of scripts in class 40% 30% 20% 10% 0% Months on the plan Generic Branded drug 21

22 The foundation of consumer engagement. A structured, coordinated product and platform that systematizes wellness in a rigorous, non-discriminatory, but fun and inspiring way. 22

23 Vitality Heritage World s longest standing health enhancement solution backed by actuarial, clinical, and behavioral science Genealogy Developed by health insurer to reduce costs by targeting poor lifestyle choices that drive increased health risks and frequency of sickness Coverage 2 million members across the United States, United Kingdom and South Africa Validation Proven success in behavior change and healthcare cost reductions across 9 million member years since 1997 Vitality encourages wellness. We believe that through its wellness program, Vitality, Discovery is able to improve the risk claims experience by encouraging healthy living and preventative screening. We believe that this impacts both the incidence and severity of claims. UBS Analyst Report

24 How do you reduce healthcare costs? Managed Care = Frequency Utilization Cost per of Sickness x of Services x Services Not addressed by current healthcare system

25 The role of healthy living in preventing non-communicable diseases Genetic and age related risks Excessive alcohol Blood pressure, cholesterol Occupational risks Health Plan Benefits Poor diet Obesity Modifiable health risks Smoking Lack of exercise

26 Vitality is designed to overcome behavioural biases 1 Know how healthy you are Benchmark individual health status Increase knowledge levels around health and lifestyle Improve early detection of chronic and other illnesses 2 3 Set personal goals to improve your health Enjoy the rewards Tailor the Vitality programme to maximise impact of interventions Points and reduced participation costs incentivise a positive change in behaviour Broad access to a range of fitness / lifestyle partners Mitigate impact of hyperbolic discounting Participation allows members to accumulate points Points are redeemable as discounts on a variety of items and services

27 Structure of the Vitality Wellness program Know how healthy you are Set personal health goals Enjoy rewards

28 Vitality s assets and capabilities Complete an HRA Determine Vitality Age and set goals Obtain a Personal Pathway Achieve a Status and earn Vitality Bucks Enjoy rewards Assets and capabilities Online capability Clinical and scientific basis Personal Pathway algorithms Wellness network Actuarial points allocation methodology Reward network Intelligent incentives

29 Vitality life insurance integrator : Extending the select period 1. Dynamic pricing: The use of Vitality in life assurance has fundamentally altered the traditional approach to underwriting. By incentivising policyholders to engage in wellness by linking life assurance premiums to health status, Discovery is able to underwrite policyholders on an ongoing basis, thereby extending the select period for those policyholders who manage their health. 2. Upfront premium discounts: In order to improve price points and competitiveness, Discovery provides an upfront premium discount of between 15% and 25% in anticipation of future Vitality engagement. Actual engagement in Vitality will dictate the future size and direction of the premium adjustment. Blue 2.25% Vitality status Bronze Silver 1.5% 0.5% Gold -0.5% Mortality rate Ultimate Underwriting Select 2

30 Product construct: Retaining better lives Relative lapse rate: Vitality not only appears to attract better lives to Discovery Life, but also has the effect of minimising select lapsation. In this regard, there is a strong correlation between lapse rates and Vitality status. At the extremes, a Gold Vitality member is 65% less likely to lapse than a Blue Vitality member. 100% 90% 80% 70% 60% 50% 40% Lapse rate by Vitality status: Discovery Life 30% Blue Bronze Silver Gold 3

31 Building the case for incentivised wellness 1 2 Introduction to Discovery Global backdrop 3 Overview of Vitality 4 Science behind Vitality 5 Studies into efficacy of Vitality programme 6 Healthy Foods programme

32 Understanding the flow of the Vitality program Complete an HRA Determine Vitality Age and set goals Obtain a Personal Pathway Achieve a Status and earn Vitality Bucks Enjoy rewards Clinical health assessment alogirthm

33 Vitality Age A meta-analysis of over published studies Study conducted by UCT specifically for Discovery Study investigated relative risk data using rigorous and clearly defined criteria for inclusion Considered all cohort studies from 1990 to 2006 which considered at least all-cause mortality Criteria for inclusion included urban samples, ages below 70, and evidence of appropriate adjustment for covariate factors such as demographics, co-morbidities and socio-economic status 33

34 Vitality Age 75m life years worth of data Cancer Prevention Study Nurses Health Study Multiple Risk Factor Intervention Trial Norwagian Population Cohort Harvard Nurses Health Study and Health Professionals Follow-up Korean National Health Insurance Study Swedish Construction Workers United Stated National Institute of Health-AARP Diet and Health General Practice Research databse Korea Medical Insurance Corporation Sweden Lung Cancer Canadian National Breast Screening Study Taiwan teachers and civil servants cohorts Japan Collaborative Cohort Study Physicians Health Study Singapore Health Study Health Professionals Follow-up Study Others 0 4,000,000 8,000,000 12,000,000 16,000,000 34

35 Outcomes of the scientific research Male age 45; Risk factors overweight, smokes, elevated cholesterol Relative mortality risk factors, derived from the meta-analysis, translated into years of life expectancy lost Drivers of extra mortality risk BMI: 31 Smokes: 20 per day Cholesterol: 232 mg/dl increased mortality risk years lost 17% Overweight 43% Smoking 40% Elevated Cholesterol age Vitality Age 35

36 Understanding the flow of the Vitality program Complete an HRA Determine Vitality Age and set goals Obtain a Personal Pathway Achieve a Status and earn Vitality Bucks Enjoy rewards Personal Pathway algorithms Wellness network

37 Vitality Personal Pathway TM Readiness to Change Age Gender Risk Profile Chronic Conditions

38 Personal Pathways in action: Meet Kate Complete an HRA Determine Vitality Age and set goals Obtain a Personal Pathway Achieve a Status and earn Vitality Bucks Enjoy rewards Risk assessment Vitality Age 1. Target BP Actual Age: Target glucose Vitality Age: Target cholesterol 4. BMI < Tobacco free 6. Exercise 3x per week Goals 1. Improve diet 2. Increase exercise

39 Personal Pathways in action: Meet John Complete an HRA Determine Vitality Age and set goals Obtain a Personal Pathway Achieve a Status and earn Vitality Bucks Enjoy rewards Risk assessment Vitality Age 1. BP high Actual Age: Glucose high Vitality Age: Cholesterol high 4. BMI > Smoker 6. No exercise Goals 1. Quit smoking 2. Lose weight 3. Start to exercise 4. Manage diabetes 5. Reduce cholesterol

40 Understanding the flow of the Vitality program Complete an HRA Determine Vitality Age and set goals Obtain a Personal Pathway Achieve a Status and earn Vitality Bucks Enjoy rewards Reward network Intelligent incentives

41 Spectrum of Vitality rewards South Africa Value Frequency of use

42 Member receptivity: General Vitality benefit usage Broad incentive design: Vitality offers a broad array of incentives to appeal to differing behaviour motivators, including travel, lifestyle, and fitness. Participation levels for 2009 Members are engaged across all benefit types 4

43 Building the case for incentivised wellness 1 2 Introduction to Discovery Global backdrop 3 Overview of Vitality 4 Science behind Vitality 5 Studies into efficacy of Vitality programme 6 Healthy Foods programme

44 The Vitality Insured Persons (VIP) studies Vicki Lambert PhD Wayne Derman PhD Thomas Gaziano MD Roseanne da Silva Mike Greyling VIP study researchers UCT/MRC Research Unit for Exercise Science and Sports Medicine at the University of Cape Town Brigham and Women s Hospital, Harvard Medical School University of the Witwatersrand School of Statistics and Actuarial Science University of the Witwatersrand School of Psychology 1 st VIP study Examined the association between members level of engagement with the programme and their medical claims experience 2 nd VIP study Examined the association between the level of participation or engagement in the programme and medical claims for lifestyle-related, modifiable chronic conditions 3 rd VIP study To determine the association between participation in fitness-related activities alone healthcare costs Deepak Patel Craig Nossel Discovery Adam Noach

45 Vitality Insured Person s Studies : Cross-sectional Studies 45

46 The Vitality Insured Persons (VIP) studies: Methodology Distribution according to engagement level 90, , , ,728 NR NE LE HE Members registered for the chronic benefit 156,098 1 st VIP Study based on 948,974 Discovery Health members in 2005 and ,134 were members of Vitality Adjustments for covariates such as age, gender, chronic status and health plan Members were subdivided into groups NR (Not registered on Vitality) NE (Not engaged 0 points) LE (Low engagement less than points) HE (High engagement more than points) 2 nd VIP study only focussed on the 156,098 members registered for the chronic benefit 792,876 Chronics Non-chronics 3 rd VIP study further subdivided fitness status INACTIVE (< 4 gym visits per month) LO (4-24 gym visits per month) MED (24-48 gym visits per month) HI (> 48 gym visits per month)

47 Engaged members experienced lower costs per patient, shorter stays in hospital, and fewer admissions compared to all other groups 100% Engaged members experienced lower costs per patient Engaged members had lower admission rates Not Engaged Benchmark 95% 90% 85% 80% 75% 70% Cancers Cardiovascular Diseases Endocrine and metabolic disease Musculoskeletal Cancers Cardiovascular Diseases Endocrine and metabolic disease Musculoskeletal Source: Participation in an Incentive-based Wellness Program and health care costs: Results of the Discovery Vitality Insured Persons Study. Please do not quote without written permission from Discovery or PruHealth. Key findings are that Highly Engaged beneficiaries [of Vitality] experienced lower costs per patient, shorter stays in hospital, and fewer admissions compared to all other groups (P< 0.001).

48 Generating savings - Vitality associated with reduced cost of hospitalisation Cost of hospitalisation per engaged Vitality member as a proportion of the cost of non-vitality members 100% Hospital cost per 90% non-vitality 90 member 80% 70% 60% 50% 40% 30% 20% 10% % Source: VIP studies Multiple metabolic conditions Hypertension Dyslipidaemia Cancer Mental illness Beneficiaries with single conditions Key findings, with respect to chronic conditions, Highly Engaged Vitality chronic beneficiaries had significantly lower costs per patient than Low Engaged (P < 0.001) and Not Engaged (P < 0.001).

49 Engaged members experienced lower costs per patient, shorter stays in hospital, and fewer admissions compared to all other groups 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Hospital admission rates by fitness engagement Not Engaged benchmark Source: Vitality Insured Person studies

50 VIP Study 3: Fitter people spend less time in hospital and incur lower healthcare costs 1. Admission rates 9.6% lower in highly active individuals vs inactive As % of NR 110% 100% 90% 80% 70% 100% 100% 97% 95% 90% NR INACTIVE LO MED HI 2. Length of stay in hospital On average 0.57 days shorter for highly active individuals vs inactive As % of NR 110% 100% 90% 80% 70% 100% 96% 88% 85% 75% NR INACTIVE LO MED HI 3. Cost per patient Medical costs once hospitalised R5,052 lower for highly active individuals vs inactive As % of NR 110% 100% 90% 80% 70% 100% 103% 99% 98% 86% NR INACTIVE LO MED HI Source: Vitality Insured Person studies

51 The Vitality longitudinal studies Aims Study the long-term association between engagement with Vitality and healthcare claims Retrospective longitudinal analysis Vitality and Non-Vitality members from 2001 to 2008 inclusive.

52 VIP 2: Aims of the retrospective longitudinal fitness study 1. To examine changes in fitness-related behavior over time with continued membership of Vitality 2. Are changes in fitness engagement associated with changes in health claims over a 5 year period? 52

53 Fitness Categories Fitness Inactive: 0 to 4 gym visits per year Fitness Low Active: 4 to 24 gym visits per year Fitness Medium Active: gym visits or 0 to 4999 SA Active points Fitness Engaged: > 48 gym visits or at least 5000 SA Active points

54 Sample and Methods ,054 adult members ,467 Discovery Health members who joined Vitality ,587 Discovery Health members not on Vitality Enrolment 3 years Intervention Trends in fitness engagement Years 1 to Outcomes Probability & cost of admission Years 4 &

55 Group definitions for changes in fitness-related activities from years 1-3 after enrolment Inactive No Inactive in years 1 and 3 Change Inactive Inactive in year 1 Low, Moderate or High Active in year 3 Increased Active Low, Moderate or High Active in year 1 - Decreased by at least 1 fitness Decreased category in year 3 Active Low, Moderate or High Active in year 1 - No change in year 3 No Change Active Increased Not on Low, Moderate or High Active in year 1 - Increased by at least 1 fitness category in year 3 Not on the health promotion program from year 1 to year 3 Vitality 55

56 Trends in membership of Vitality, gym membership and average annual gym visits per gym member. Year Using Gym %Using Gym Visits Per Member Using Gym % members earning any points on Vitality Gym Points, as a % of total points % % 54.9% % % 51.3% % % 53.1% % % 56.6% % % 47.6% % % 50.4% % % 54.5% 56

57 . Changes in fitness status distribution over 5 years Year 1 Year 2 Year 3 Year 4 Year 5 OR (95%CI) for transition (yrs 1-3) OR (95%CI) for transition (yrs 1-5) Inactive 76% 72% 71% 70% 68% 0.8 ( ) Low Active 8% 8% 9% 8% 8% 1.12 ( ) Moderate Active 7% 8% 8% 10% 10% 1.31 ( ) High Active 10% 12% 12% 12% 13% 1.19 ( ) 0.58 ( ) 1.04 ( ) 1.63 ( ) 1.26 ( ) 57

58 Probability & Cost of admission for years 4 and 5 according to engagement in fitness activities in years 1 and 3 Trends in fitness program engagement Probability of admission in years 4 and 5 Cost of admission in years 4 and 5 Not on Vitality 20.7% R 6,134 Active- Decreased 21.3% R 6,246 Active- No Change 19.9% R 5,755 Active- Increased 20.0% R 5,682 Inactive- No change 21.8% R 6,774 Inactive-Increased 21.4% R 6,348 58

59 . Odds ratios for probability of hospital admission with increasing numbers of gym visits. Odds ratio for hospital admission (95% CI) No exercise visits per year 0.97 ( ) 52 visits per year 0.93 ( ) 78 visits per year 0.90 ( ) 104 visits per year 0.87 ( ) Persons attending gym twice a week had a 13% reduced odds of hospital admission compared to those who did not attend gym at all. 59

60 The impact of Vitality: Health Open enrolment and community rating makes it is important to attract and retain good risks to counter anti-selection Vitality plays a significant role in attracting good risk Existing Business New Business by Vitality engagement Sensitivity of surplus to lapses of highly engaged Vitality members Impact on surplus (Rupees million) 100% 95% 90% Gross claims ratio 85% 80% 75% 70% 65% 60% % % All members Non Vitality Blue and Bronze members Silver and Gold members Vitality status at the end of the year following entry onto the scheme 0 11% (market average) 9% 6% 3% (Discovery average) Note: The sensitivity to surplus was estimated using the outcomes of the Discovery Vitality Insured Persons Study. Members were classified into different levels of engagement according to their level of physical activity. 60

61 Impact on DHMS surplus 1 Claims were 3.3% lower due to Vitality 5.1% lower due to Vitality 45% of the surplus arising in 2007 in the Discovery Health Fund was a result of Vitality engagement This is after risk adjustment for selection The difference is expected to increase over time with lower withdrawals 0.9 Year 1 Year 5 *Surplus = Premiums - Claims - Expenses 61

62 The impact of Vitality: Life Insurance Improved mortality, morbidity and persistency Retention of better risks 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Severe illness claims Capital disability claims Non-Vitality = 100% Death claims Lapse rate Lapse rate by Vitality status 100% 90% 80% 70% 60% 50% 40% 30% Blue Bronze Silver Gold 62

63 Building the case for incentivised wellness 1 2 Introduction to Discovery Global backdrop 3 Overview of Vitality 4 Science behind Vitality 5 Studies into efficacy of Vitality programme 6 Healthy Foods programme

64 Launching Vitality HealthyFood 15% - 35% saving on nutritional items purchased at Pick n Pay

65 Nutritional assessment methodology based on WHO and International Dietary Guidelines Independent Nutrition Panel Qualifying criteria Name Prof Tim Noakes Prof Vicki Lambert Dr Nelia Steyn Anne Till Prof Christine Venter Gerda Gericke Jane Badham Specialisation ESSM, University of Cape Town ESSM, University of Cape Town Chief Specialist Scientist, Medical Research Council Registered Dietitian School for Physiology, Nutrition and Consumer Sciences, North-West University Division of Human Nutrition, University of Pretoria Food Industry and Legislation 1 Nutrient Foods must meet WHO dietary recommendations Saturated fat Trans fat Sodium Added sugar Dietary fibre WHO dietary recommendations 10 en% 1 en% 1.2mg/kcal* 10 en% 1.3g/100kcal** 2 Food must have nutritional value

66 Broad range of HealthyFood product categories Vegetables and fruit Chicken, fish & meat alternatives Breads and cereals Snacks Beverages Vegetable oils and spreads Supplementary products Milk and dairy products * Only certain products in the category which meets the HealthyFood quality criteria

67 Clinical rigour in determination of HealthyFood Fruit and vegetables 3,000 products Grains and cereals 1,425 products Nutrient Saturated fat Trans fat Sodium WHO dietary recommendations 10 en% 1 en% 1.2mg/kcal Chicken, fish and meat alternatives 479 products Vegetable oils and nuts 536 products Lentils and legumes 373 products Added sugar Dietary fibre 10 en% 1.3mg/kcal Milk and dairy products 217 products 61,000 products assessed; 6,000 classified as HealthyFood TM

68 Vitality HealthyFood benefit All adults on Vitality Members who Members identify Data reconciliation Cash back into will receive a HealthyFood card that can be used at Pick n Pay. complete the Vitality Personal Health Review will increase their HealthyFood HealthyFood items by the HealthyFood logo. customer account or DiscoveryCard. saving to 25%. The HealthyFood card carries an automatic 15% saving on HealthyFoods. Members will also earn 10 Vitality points for every HealthyFood item they buy (up to a max of 500 points pm). Members present their HealthyFood card at the till point when paying to record their HealthyFood purchases. 1. Determination of HealthyFoods purchased. 2. Calculation of HealthyFoods saving. 3. Check against benefit limit. 4. Allocation of Vitality points. In addition to usual DiscoveryCard cashback (5% to 10% depending on their Vitality status). Total HealthyFood saving of up to 35%.

69 Case study: Healthy basket Healthy foods total R Vitality Discount R Vitality points 220

70 Mechanics of HealthyFood benefit HealthyFood purchases marked on till slips

71 Incentivising appropriate behaviour Number of trolley loads purchased HealthyFood % of trolley 3,500,000 21% 3,000,000 20% 2,500,000 19% 2,000,000 1,500,000 18% 1,000,000 17% 500,000 16% - 15% Feb-09 Jan-10 Purchasing behaviour: Over 3 m trolley loads (R275m) of HealthyFood, have been purchased through the benefit in 11-months since launch; evidence of a meaningful shift in purchase behaviour towards a higher-composition of HealthyFood, in line with strategic objective, over 21% of baskets now comprising HealthyFoods. 7

72 Increasing spend on healthy foods % of total spend at Pick n Pay 18.0% 18.7% 19.0% 19.5% 19.7% 20.0% 21.1% 21.6% HealthyFood TM - baskets are getting healthier

73 Top 10 selling HealthyFood items R 6,1m R 4,4m R 3,8m R 3,5m R 3,5m R 3,3m R 3,3m R 3,2m R 3,2m R 2,9m Eggs Tuna Vegetable oils Skinless chicken Tomatoes Fat free diary Apples Potatoes Bananas Rice

74 HealthyFood TM : Impact on health awareness Personal Health Review completion rate 140,000 PHR , ,000 80,000 60,000 40,000 20,000 PHR Jan 15 Jan 29 Jan 12 Feb 26 Feb 11 Mar 25 Mar 08 Apr 22 Apr 06 May 20 May 03 Jun January June

75 Developing healthy kids

76 Vitality Kids- Schools Program

77 Concluding remarks On a risk adjusted basis, Vitality improves health and reduces claims Increasing engagement leads to a significantly lower claims trend over time Well structured rewards and personal communication leads to increasing engagement This leads to major benefits in terms of attraction and retention of healthy members, and improving the health of all members Provides opportunities for introducing rewards and penalties, thereby decreasing costs by making clients healthy 77

78 Introduction to Vitality Greg Morris, International Business Development Actuary