why behavioural economics is essential for the success of ...6e5131ba-1a6a-42ee... · why...

Why behaviouraleconomics is

essential for the success of the

implementation of a wearable or health

app

Behavioural Research Unit

Behavioural Economics & Wearables | November 2018 | Prof Vlaev, Dr Lubczanski 2

Prof Ivo Vlaev – Professor of Behavioural Science, Warwick Business School, University of Warwick. Ivo received a DPhil (PhD) in Psychology from the University of Oxford. Before coming to Warwick, Ivo worked as a research fellow at University College London and senior lecturer at Imperial College London. He has a track record of research in behavioural economics and behaviour change, which is published in peer-reviewed academic journals, book chapters and government reports.

Dr Lizzy Lubczanski – Research Manager at Swiss Re’s Behavioural Research Unit. Lizzy joined in 2014 and leads our applied research and academic collabroations. The team has completed 150+ behavioural research trials with client in over 30 countries with over 40 clients. The team’s focus is on learning what drives the behaviour of humans involved in insurance transactions.

a

Behavioural Research Unit

Speakers:


Agenda

Introduction to themes of health management in the insurance industry

Do wearables work? An overview from academia

Implications for insurance

Where next?

Behavioural Economics & Wearables | November 2018 | Prof Vlaev, Dr Lubczanski

• Wearables and health apps have expanded from tracking fitness, to collecting data and providing actionable & personalised insights on all aspects of health, including:

nutrition exercise sleep stress genetics

• The next wave of wearables focuses less on tracking steps and more on monitoring vital signs with accuracy and detecting health parameters.

• User interfaces are becoming increasingly sophisticated – providing predictive health assessments, offering personal guidance and becoming easier to use and more interactive.

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More than just a step counter


Prevalence of wearables in the insurance industry

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Why are insurers interested?

Attract healthy lives

Promote higher engagement and retention of policy holders

Make the world more resilient, by helping insureds maintain a healthy lifestyle – claim prevention

Wearables are a ‘digital fix’ to achieve health management. Their aim is to:


But do they work?

…or not?In 2014 only 1% to 2% of individuals in the United States had used one3.

1 Text A2 Text B3 Text C

People love wearables!There’s lots of astonishing stats of how big the wearables market will

grow to in the coming years e.g. $34 billion1, and 830 million devices2 by

2020.

…or not?A survey of wearable device users revealed that three-quarters considered themselves 'early adopters of technology', half were under the age of 35, and just under a third earn more than $100 000 a year4.

…or not?Validity will be influenced by factors including the type of accelerometer, its location on the user's body, the amount of time per day that it is worn, the type of activity, and the equation used to convert acceleration counts to energy expenditure5.

They help to target the ones who’d benefit the most from them

They collect a lot of useful data


What’s the issue?

…or not?32% of users stop wearing them after 6 months and 50% after 1 year1.Many wearables suffer from being a “solution in search of a problem." They don’t add functional value that is already expected from personal technology of that type, and they require too much effort, which breaks the seamless user experience2.

1 Text A2 Text B3 Text C

People keep using them

…or not?Several devices will require an active element of engagement including remembering to wear and charge the device, as well as to perform additional actions to make use of the data such as upload, or at the very least, read the reports created from the behaviour data.

People just need to wear them


What works to drive health behaviour change

Wearables do not work without behavioural theory

Technology on its own is not a solution


REPETITION

Automatic & quickNo voluntary control

Effortless

DECISIONInformation

presentation

Recognised

Not

Recognised

ReflectiveRequires our attention

Effortful

SYSTEM 1

THINKINGPROCESSES

‘FAST’

SYSTEM 2

THINKINGPROCESSES

‘SLOW’

10

Two types of thinking: An interactive division of labour

Affect heuristic

Bandwagon effect

Default bias

Impact bias

Loss aversion bias

Optimism bias

Order effects

Relative risk bias

The tendency to

prefer avoiding

losses than

acquiring gains

OVERRIDE


What’s out there that works?

Tailored education about self-management via 2-

way communication with health team

Individualised goal-setting, action planning and

feedback (diet, exercise, blood glucose, blood pressure)


What’s out there that works?

Habitual control over drug dosage and adherence

Habit Formation

Cue

Taking Pill

Reward action

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Reminders prompting individuals to act

Your NHS Health Check

is due tomorrow.Its time for a brisk walkMake sure your food

portion size is right for

you.Its time to take your pillsYou’re near a bar! You

agreed to drink less and

avoid smoking!


Wellth app helps patients achieve better adherence, engagement and health

employs ‘loss aversion’ bias

serves the most common chronic conditions

mitigates risk for health insurers and providers to reduce costs

wellthapp.com


Social media Food picturesGames Wearable sensors

Fernandez-Luque, L. et al. "Implementing 360° Quantified Self for childhood obesity: feasibility study and experiences from a weight

loss camp in Qatar." BMC medical informatics and decision making 17.1 (2017): 37.

eHealth to fight Obesity


Caveats

Evidence for the sustainability of behaviour change is limited

• actual health outcomes are not measured

• only few interventions evaluate long-term effects (1 year)

• intervention effects diminish over time (relapse rates are high)


• Partner with vendors with expertise in behaviour change.

• Select wearables/health apps with evidence in effective behaviour change.

• Use test and learn to maximise uptake and engagement with the apps.

• Embed incentives and engagement into product design.

• Consider the implications for employee health schemes.

• Embed nudges based on behavioural biases e.g. defaults, norms, curiosity, loss aversion, timely reminders, ease etc.

What does this mean for insurers?

16

customer registration

Maximising your customers’

engagement with their

health

designing rewards & incentives

correspondence response

targeted messaging

reducing drop outs

sustained usage


How Swiss Re is engaging in behaviour change


Understanding the drivers of behaviour changefrom the academic perspective is key for insurers tomake sense of their policy holders, & they also needto understand technologies

There needs to be a societaleffort, including coordinationfrom the public sector, andinvestments from the industry(system theory)

In addition to improving health, thereare further benefits for insurers

Where next?

For impactful health behaviour change by insurers: the focus on understanding the human being is key


Preventative healthcare integration

Focus on the other benefits

Alternative data source for underwriting – remove the need for labs

Enhanced in-force management – help insureds maintain a healthy lifestyle

Consumer engagement – improve loyalty and reduce lapse experience

Attract ‘super healthy’ & promote good risk

Earlier disease identification

Chronic disease management


Legal notice

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©2018 Swiss Re. All rights reserved. You are not permitted to create any modifications or derivative works of this presentation or to use it for commercial or other public purposes without the prior written permission of Swiss Re.

The information and opinions contained in the presentation are provided as at the date of the presentation and are subject to change without notice. Although the information used was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage or loss resulting from the use of the information contained in this presentation is expressly excluded. Under no circumstances shall Swiss Re or its Group companies be liable for any financial or consequential loss relating to this presentation.

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