Why behavioural economics is essential for the success of the implementation of a wearable or health app. Behavioural Research Unit

Transcription

1 Why behavioural economics is essential for the success of the implementation of a wearable or health app Behavioural Research Unit

2 Speakers: 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. 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. a Behavioural Research Unit Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski 2

3 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 3

4 More than just a step counter 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. Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski 4

5 Prevalence of wearables in the insurance industry Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski 5

6 Why are insurers interested? Wearables are a digital fix to achieve health management. Their aim is to: Make the world more resilient, by helping insureds maintain a healthy lifestyle claim prevention Promote higher engagement and retention of policy holders Attract healthy lives Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski 6

7 But do they work? 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 billion 1, and 830 million devices 2 by or not? In 2014 only 1% to 2% of individuals in the United States had used one 3. They help to target the ones who d benefit the most from them 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 $ a year 4. They collect a lot of useful data 1 Text A 2 Text B 3 Text C 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 expenditure 5. Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski 7

8 What s the issue? People keep using them or not? 32% of users stop wearing them after 6 months and 50% after 1 year 1. 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 experience 2. People just need to wear 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. 1 Text A 2 Text B 3 Text C Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski 8

9 What works to drive health behaviour change Wearables do not work without behavioural theory Technology on its own is not a solution Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski 9

10 Two types of thinking: An interactive division of labour Automatic & quick No voluntary control Effortless Recognised SYSTEM 1 THINKING PROCESSES FAST Information presentation REPETITION OVERRIDE DECISION Not Recognised SYSTEM 2 THINKING PROCESSES SLOW Reflective Requires our attention Effortful 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 Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski 10

11 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) Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski

12 What s out there that works? Habit Formation Taking Pill Habitual control over drug dosage and adherence Cue Reward action Reminders prompting individuals to act Your NHS Health Check Its is due Make time for a brisk walk tomorrow. sure your food portion Its You re time size to near take is right a bar! your for You pills you. agreed to drink less and avoid smoking! Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski 12

13 Wellth app helps patients achieve better adherence, engagement and health wellthapp.com employs loss aversion bias serves the most common chronic conditions mitigates risk for health insurers and providers to reduce costs Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski

14 ehealth to fight Obesity Games Social media Food pictures 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. Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski

15 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) Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski 15

16 What does this mean for insurers? 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. designing rewards & incentives customer registration reducing drop outs Maximising your customers engagement with their health correspondence response sustained usage targeted messaging Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski 16

17 How Swiss Re is engaging in behaviour change Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski 17

18 Where next? For impactful health behaviour change by insurers: the focus on understanding the human being is key Understanding the drivers of behaviour change from the academic perspective is key for insurers to make sense of their policy holders, & they also need to understand technologies There needs to be a societal effort, including coordination from the public sector, and investments from the industry (system theory) In addition to improving health, there are further benefits for insurers Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski 18

19 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 Chronic disease management Preventative healthcare integration Earlier disease identification Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski

20 Legal notice 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. Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski 20

21 Behavioural Economics & Wearables November 2018 Prof Vlaev, Dr Lubczanski 21