Maximising the health insurance opportunity

The individual market

An introduction for advisers

I don't have the right clientbank

Its a difficult market to enter

Its not rewarding

enough

Most common barriers to writing Health Insurance

Do I have the customers who would buy Health Insurance?

Source: Involve Millennium / fast.MAP. – Over 50s Tracker 2011

Buyers VALUE the reassurance health insurance provides

How much are the HEALTH COSTS insured against?

SCANS

Chest X-ray

Ultrasound

MRI

CT Scan

SURGICAL PROCEDURES

Cataract Surgery

Inguinal hernia repair

Hysterectomy

Cruciate repair

Hip replacement

Heart Bypass

DIAGNOSTIC PROCEDURES

Sigmoidoscopy

Colonoscopy

Gastroscopy

Coronary angiogram

Arthroscopy

Source: The Private Healthcare UK

The healthcare costs members insure against are significant

Find Out What’s Wrong Treat What’s Wrong

Typical self-pay rates

The HEALTH COSTS insured against can be alarming!

SCANS

Chest X-ray £101

Ultrasound £268

MRI £516

CT Scan £615

SURGICAL PROCEDURES

Cataract Surgery £2,480

Inguinal hernia repair £2.586

Hysterectomy £6,027

Cruciate repair £6,369

Hip replacement £10,385

Heart Bypass £14,000

DIAGNOSTIC PROCEDURES

Sigmoidoscopy £1,496

Colonoscopy £1.914

Gastroscopy £1,529

Coronary angiogram £2,842

Arthroscopy £3,131

Typical self-pay rates

Source: The Private Healthcare UK

One hospital stay can cost more than £10k.

Find Out What’s Wrong Treat What’s Wrong

Top 5 concerns over the next 5 years

35-49 50-64 65-74 75+

Staying fit and well 2 1 1 1

Accident or illness 5 4 2 3

Not having enough money 1 2 =5

Not having a comfortable lifestyle 4 3

Being a burden on family & friends 4

No longer being able to drive 4 =5

Maintaining independence 5 3 2

Grandchildren’s future 5

Parent’s wellbeing 3

Source: Involve Millennium / fast.MAP. – Over 50s Tracker 2011

Health remains a number 1 priority

Members don’t actually want to use their plan!

Integrating Health and Wellness

3 Controllable Behaviours

4 Diseases of lifestyle

50% of deaths worldwide

The Oxford Health Alliance 3/4/50 model

Impact of lifestyle

choices

Source: Oxford Health Alliance, 3four50.com, July 2015

Sources: 1. H.-C. Hung 2005 (J Nat Cancer Ins)2. F.B. Hu , The New England Journal of Medicine, DIET, LIFESTYLE, AND THE RISK OF TYPE 2 DIABETES MELLITUS IN WOMEN, 2001 3. Fruit and Vegetables Consumption and Gastric Cancer: A Systematic Review and Meta-Analysis of Cohort Studies, 20094. 4. C3 Collaborating for Health - The benefits of physical activity for health and well‐being, 2012 5. The American Cancer Society - The Tobacco Atlas, 2006

Impact lifestyle has on health

Small changes to lifestyle can have a dramatic impact on the state of ones health

Five servings of fruit and vegetables each day reduces the risk of:•Cardiovascular disease by 28%1

•Type 2 diabetes by 24%2

•Some gastrointestinal cancers 3

Physical activity reduces the risk of:4

•colon cancer: the most active people are at 30% lower risk than the least fit;•stroke by 25–30% among active individuals•diabetes by 27%•plus benefits for musculoskeletal and mental health.

5 million people die prematurely from tobacco use each year5

•By 2025, this figure could increase to 10 million.

More evidence...

• Lack of exercise• Poor diet• Smoking3

Controllable Behaviours • Cancer

• Diabetes• Lung disease• Cardiovascular disease

4 Diseases of lifestyle

50% of deaths worldwide

VitalityHealth is an integrated health and wellness solution, helping and rewarding members to make healthy lifestyle choices and providing high quality of care at the point of need.

Traditional PMI Model focused here.

Provides benefits to the less than 20% that claim every year.

Source: Oxford Health Alliance, 3four50.com, July 2015

VitalityHealth –benefits for all = appeals to wider audience.

VitalityHealth’s approach to health lends equal weight to prevention and sickness...

SICKNESS

Primary care

Rehab

Acute

Chronic

HospitalWELLNESS

Screening

Nutrition

Smoking Cessation

Mental Wellbeing

Physical Activity

SICKNESS

Primary care

Rehab

Acute

Chronic

Hospital

...but is truly integrated...

WELLNESS

Screening

Nutrition

Smoking Cessation

Mental Wellbeing

Physical Activity

5 good reasons to choose VitalityHealth

Helping and rewarding our members for making

healthy choicesMembers choose their

consultant, not us!

No consultant shortfall guarantee on eligible treatment with

recognised consultant

Members don’t have to go public before they go private

control premiums through engagement

with Vitality

Plus... When your client takes a VitalityHealth plan we double their Life policy cashback!

Single life: from £100 to £200 Joint life: from £200 to £400

makes it easier, cheaper and more rewarding to be healthy

With VitalityHealth – you are offering an award winning product

People who buy VitalityHealth are just like a typical IFA clientbank!

Because it offers members more than traditional PMI, its appeal is more widespread.

6% 6% 7.5% 4% 4.5%

6% 11% 13% 22% 15%

Because healthy living is a smart choice

Because there is always time to be healthy

Because when its your family’s health you don’t want to wait

Because when its your family’s health you don’t want to take risk

Because prevention is better

Why?

You are already advising these clients...

And you're already having conversations about health/illness when you talk about SIC and IP. So it doesn't require a big change/extension to the advice process.

Protection clients• Greater propensity to

buy / have healthcare• Naturally fits sales

process• Fast diagnostic could

trigger SIC claim• Increase deferred

period on income protection

Pension clients• Help make retirement

healthy• Route into employers

and further cross sell

Wealth clients• Wealth is nothing

without health• 62% HNW customers

have Health Insurance• Potential business

owners, leading to further cross sell

...and it’s not just your

protection clients that

would buy (or already

have) healthcare.

Vitality in action

How can we help remove the barriers?

Comprehensive support

Over 150 Field Based Broker Consultants (covering Vitality Heath & Life)

Support material / tools targeted for new to market brokers

Online training and accreditation through the Vitality Academy

Range of advice and commission models

Backed up by a dedicated team of highly experienced Healthcare Specialists

Comprehensive support

Vitality has made a significant

investment in helping brokers

capitalise on the health

opportunity in their existing

clientbank

Robust training and accreditation

Unique online learning and accreditation system

Continued Professional Development log

Two levels:

Foundation : providing a sound level of product knowledge

Advanced : through understanding of Lifestyle Health Insurance and how this differs from traditional health insurance

Potential uplift in commission rates and investment in CII IF7 Healthcare Product exam available

Comprehensive

learning & development

support

Making it rewarding for your customer, and rewarding for you too!

Lifestyle Health Insurance advice models Standard

Advised model

Member provides the advice under a

multi provider model

45% Initial with 5% renewal commission

Single Tie model

Member only advise on the VitalityHealth product range

Tier 1 - 60% InitialTier 2 - 55% InitialTier 3 - 50% Initial

All with 5% renewal commission

2 Year Terms

Member make initial sale and

VitalityHealth take over renewal

process

90% Initial, subject to 2 year clawback period.

No renewal

Lead referral

Leads handed to VitalityHealth

Consumer Telesales to make

the sale

40% initial commission

subject to 2 year clawback. No

renewal

VitalityHealth can offer advisers a host of advice / remuneration options coupled with an intensive training programme through the Vitality Academy

Range of commission

options on offer

The ‘business case’

Attractive hourly rate

Average case of £1,200, taking 2 hours to advise and submit an application:

Standard terms = £270 per hourTier 1 Single tie = £360 per hour2 year terms* = £540 per hour

Additional annual income created

Advise on 2 cases per month, creates extra annual income of:

Standard terms = £13kTier 1 Single tie = £17K2 year terms* = £26k

NotesAll figures for illustration only and based on initial commission only. 5% renewal is also payable.* Subject to 2 year clawback and no renewal commission payable

I don't have the right clientbank•You don’t need to claim to benefit from your VitalityHealth plan.

•Appeals to a much wider customer base than traditional PMI

•You already advise these customers

Its a difficult market to enter

•Support of a local face to face Business Consultants

•Vitality Academy to support learning•Range of sales tools

Its not rewarding enough

•Can be incremental to establish sales process

•Supports customer loyalty•Range of attractive commission models

Back to those reasons for not advising...

With our support, you can realise the healthcare cross-sale opportunity in your clientbank