You are here
Japanese insurer using gym discounts as reason to buy its cover
[TOKYO] When it comes to living a healthy lifestyle, most people need a little encouragement. One of Japan's biggest insurers is hoping to capitalize on that by adding an extra incentive.
The company, Sumitomo Life Insurance Co, aims to sell 5 million new policies in its home market over the next 10 years by using a program designed by South Africa's Discovery Ltd that gives discounts to customers who exercise and eat healthy.
The Osaka-based insurer, which has seven million customers, is seeking to tap increased demand from people seeking to improve their quality of life as they age, Chief Executive Officer Masahiro Hashimoto said in an emailed response to questions. The company is betting that healthier clients will claim less against their policies as it responds to a declining population and people getting married later in life.
While the World Bank estimates the average life expectancy in Japan at 84, the country's Ministry of Health, Labor and Welfare indicates many spend their final years in poor health and without being able to live independently. At least 80 per cent of deaths in the country are caused by non-communicable diseases, according to the World Health Organization.
"There has been a steady increase in public awareness of health in Japan," Mr Hashimoto said. Results from a survey done by the company showed that more than a fifth of Japanese consumers wanted "health-promotion type insurance," indicating a substantially better chance of selling cover when it is coupled with life-improving incentives, Hashimoto said.
The partnership is the latest to go live for Discovery, which has more than 8.4 million customers on its Vitality loyalty program through partnerships in 17 countries. Vitality charges a monthly fee in exchange for discounts for gym memberships, wearable devices, healthy food and hotel bookings. The Johannesburg-based company, which started off as a health-insurance administrator in 1992 before branching into life cover, investments and banking, uses Vitality to sell nine in every 10 Apple Inc watches in South Africa.
Sumitomo Life currently has about 11.8 million policies with an estimated 10 per cent share of the Japanese insurance market, the world's second largest.
The insurer's Vitality clients will get a 15 per cent discount on insurance premiums upfront, which can increase or shrink, depending on how actively customers use the program. The venture started distributing the products through 110-year-old insurer's network of 32,000 advisers throughout Japan on Tuesday after more than two years of preparation work and regulatory approvals.