Bank Integrator Qorus Banking Innovation Awards 2019 - Winner

Traditionally, life insurers use limited information about a policyholder’s financial risk, primarily their level of income, as a means to segment their risk pool. In general, clients with high incomes pay lower premiums because they are thought to be better risks, and clients with lower incomes pay higher premiums over time because they are thought to be worse insurance risks. This is because of the known link, in general, between financial and physical health. However, our research has shown that it is how well a person manages their finances (i.e. their financial health) that provides the link to physical health and thus can be used a proxy for health risk. Our research has shown that factors such as clients’ spend to earnings ratio and levels of short-term savings, risk protection (insurance), funds for emergencies, and retirement savings together form a more reliable measure of financial health. These insights are explored in our white paper on the Bank Integrator. For the first time globally, through Discovery Bank – the world’s first behavioural bank and Vitality Money – a global first behaviour-based financial health programme, we now have access to real time, synthesised financial data that enables us to more accurately determine our clients’ financial health at policy inception, and the ability to improve a client’s financial health over the policy term. Through the Bank Integrator we are therefore able to remove the inherent cross-subsidy that exists today between clients who have high incomes but exhibit poor financial management, and low-income clients who good financial management, resulting in better pricing of risk but also increasing fairness and equity for our clients.