Interview - Justin Taurog

It turns out to be that old business school favourite: barriers to entry. Put bluntly, Vitality is expensive to implement. “If you think how Vitality works, then think about the gym – you go there, you swipe your card in and we get that record on the day,” says Taurog. “Same thing if you wear a heart monitor for your health check. All those links will go to the system and the amount of investment to put that in place is substantial.

“The fact we can leverage off Vitality being in South Africa, China, the US and the UK gives us the ability to deliver that infrastructure. We were not building from scratch.” 

Behavioural change

In conversation with advisers, Cover has several times heard the opinion that PruProtect is cherrypicking through the use of Vitality. The argument goes, the insurer gathers customers interested in theoretically becoming slightly healthier and a better risk. Chickens and eggs come to mind, but PruProtect would debate its client base arrives on the doorstep any healthier than for other insurers.

Taurog says: “If you look at it, what we are trying to drive is that behavioural change. Now, for someone who already goes to the gym regularly, our product has a limited benefit to them.

“Take something like a Fitbug. The use of a basic pedometer, particularly by those in the middle and older ages, results in fitness gains exceeding that of gym users. We just want people to come and do a health assessment, understand their drivers. And get a personal plan.”

But by far and away the cornerstone of the sale remains serious illness cover.
“Vitality becomes something advisers say, ‘Oh, and by the way’,” says Taurog. “Although I think if they are speaking to someone they know is a triathlete, or a regular gym-goer, then they would probably hang the sale a bit more on that.”
The point of Vitality is, of course to benefit all parties financially and, to all intents and purposes, it seems to be comfortably achieving this.

Taurog says: “We have done analysis of the impact on mortality and mobility. If I recall correctly, there is almost a 50% better claims experience from Platinum members [those that engage heavily in the Vitality scheme] than someone who does not engage at all.

“It is in the interests of the customer not to make a claim, if that makes sense. That is obviously in terms of the premium reduction, so we are not just promoting health.” Well, at nearly 10% of the IFA market – and growing – one of the most individual firms in the sector might just have a point.