Why the future of life insurance lies in prevention – not only protection

Johannesburg - More of us can expect to live well past 60. According to the World Health Organization, global life expectancy reached 73.3 years in 2024, an increase of 8.4 years since 1995. Additionally, the number of people aged 60 and older worldwide is set to increase from 1.1 billion in 2023 to 1.4 billion by 2030.

The not-so-good news? This doesn’t necessarily mean a longer health span – the number of years spent in good health.

As many people age, they will face longer periods of chronic illness, creating a significant strain on healthcare systems. For example, Discovery Health Medical Scheme (DHMS) data show that members with chronic conditions incur, on average, 3.8 times higher annual costs than healthy members. They also spend 32.7% more of their life expectancy in poor health.

While life expectancy lengthens, improving the quality of those years is imperative. This is a challenge that not only healthcare systems grapple with – it also extends to life insurers.  

How future-forward life insurers are adapting to people living longer

“Life insurers face a client base that is ageing. Many providers struggle to retain the healthiest lives in the risk pool as traditional insurance models are reactive by design – providing financial security after the fact,” says Riaan van Reenen, Discovery Life CEO.

“However, encouraging and rewarding healthy living to retain a larger risk pool that lives longer and is healthier benefits clients, the life insurance industry and society at large.”

Behaviour change is central to addressing these challenges. Van Reenen cites Discovery Life data, covering January to December 2024, where life insurance clients on Gold and Diamond Vitality status experienced a 57% lower mortality risk compared to those who were not part of or did not engage in the Vitality programme.

Gold and Diamond are the top status tiers of Vitality, Discovery’s behaviour-based programme that rewards clients who reduce their risk profile by improving their health and well-being. And it works: according to Vitality research, members with a Gold or Diamond Vitality Health status can expect a life expectancy of 89 years, compared with 67 years for the insured population in South Africa.

“With longevity in mind, the life insurance industry needs to evolve from a passive risk manager to an active health partner,” emphasises van Reenen. “By integrating technology with personalised health incentives to encourage targeted behaviour change, life insurers can improve client health. In turn, this reduces claim payouts, making it clear that the future of life insurance lies in prevention, not only protection.”

The power of a proactive, Shared-value life insurance model

For more than two decades, Discovery Life has pioneered the Shared-value insurance model, which fundamentally changes how insurers engage with clients. By integrating health, wellness, and financial incentives into insurance offerings, the model creates a virtuous cycle of mutual benefit.

It’s a win-win. Clients are incentivised to adopt healthier behaviours through tangible rewards like premium discounts and cashback, insurers reduce claims and improve retention, and society benefits from the reduced healthcare burden.

Through Vitality, which utilises the integration of Vitality Health, Vitality Drive, and Vitality Money, Discovery Life already encourages clients to take control of their health and well-being, offering incentives for regular exercise, preventative screenings, engaging in healthy living habits, and even better driving.

“Instead of merely pooling risk, we create value by incentivising and rewarding positive health behaviours. Our core purpose – to make people healthier and enhance and protect their lives – guides every aspect of our business, which is underpinned by the concept of Shared-value,” explains van Reenen.

Incentivising policyholders through hyper-personalisation

Since its inception 25 years ago, Discovery Life has paid out more than R13.2 billion in PayBack benefits. Life Plan clients with integrated (linked) Discovery products and who engage with Vitality Health, receive a portion of their premiums paid back (PayBack), tax-free and accrued over a five-year cycle.

“PayBack returns enormous financial value to individuals just for living healthier lifestyles, over and above the risk benefits we pay out,” adds van Reenen. “Now, we are taking this concept even further, through the Personalised PayBack Booster – an industry-first integration between Discovery Life and Discovery Health.”

According to van Reenen, the Personalised PayBack Booster is a dynamic mechanism that uses hyper-personalisation to incentivise individuals to improve their health while generating tangible financial value. The Personalised PayBack Booster leverages Personal Health Pathways, a world-first, in-app, AI-driven platform powered by the equivalent of 80 million life-years of clinical and behavioural data.

How Discovery Life helps clients unlock significant financial rewards

The Personal Health Pathways platform, housed in the Discovery Health app, uses advanced machine learning to recommend hyper-personalised, next-best health actions. Each health pathway cycle provides up to two clinical actions, one weekly exercise goal, personalised rewards and access to the all-new Personal Health Fund through the Discovery Health Medical Scheme.

Individuals are rewarded for completing these actions (by closing a ‘ring’ in the app) and, with each action completed, can earn up to R500 into their Personal Health Fund. The Personal Health Fund allows members to accumulate up to R10 000 worth of risk-funded benefits. Accumulated funds can be used for day-to-day medical expenses, including GP and specialist consultations, medicine, radiology, and pathology. Scheme members who are also Vitality clients can earn personalised rewards through Personal Health Pathways in addition to their Vitality rewards, such as shopping vouchers and Discovery Miles.

By closing their health rings, qualifying Discovery Life clients can now improve their long-term health outcomes and unlock significant financial rewards at no additional cost. “By plugging into Personal Health Pathways, these clients can earn their maximum PayBack on their monthly Life premium, up to three times a year. This value accrues in their PayBack Fund to pay out as normal,” highlights van Reenen.

A smarter, more sustainable future for life Insurance

Life insurance is evolving beyond paying claims to actively helping prevent them. By integrating technology, behaviour-based incentives, and a Shared-value insurance model, Discovery Life is completely shifting how people engage with their health – and, ultimately, how they’ll live out the rest of their years. 

“At Discovery Life, we see insurance as a powerful force for good – not just a financial safety net, but a proactive partner in our clients’ lifelong health journeys,” says van Reenen.

Discovery Health’s Personal Health Pathways represents a transformational shift in healthcare - improving outcomes, reducing disease burden, lowering costs, and ultimately, extending lives. Through the Personalised PayBack Booster, Discovery Life proves that life insurance can move beyond risk protection; it can also enrich people’s lives through Shared-value.

“By embracing innovation, life insurers can also ensure their business and risk pool remains sustainable. They can achieve this by actively helping people be healthier, creating a reality where longevity goes hand-in-hand with the best years of one’s life,” concludes van Reenen. ,