Modelling brings opportunities to improve care and people's health, according to Vitality.
Pierre Du Toit, head of big data analytics, said firms needed to understand why clients chose a particular lifestyle, adding: "It is important to think why we do what we do. Why are we eating a piece of cake rather than an apple?"
As one of the presenters on the webinar Getting the most out of modelling, organised by The Actuary, he outlined three behaviours behind the choices people make.
First, Du Toit suggested people were "overly optimistic" about their health. Second, he said people were "present bias", meaning, they prefer an immediate benefit rather than a much bigger payout in the future.
Finally, he mentioned "nudge theory", where people respond well to incentives.
He said insurers could use data modelling to help policyholders understand their health. For instance by completing a health review, a 'vitality age' - the customer's health age as opposed to their actual age - could be determined.
"Take for example of a 45-year-old male," he said. "Suppose he has a poor diet, high BMI, smokes and has low levels of physical activity. Then he will have increased mortality risk. Vitality age will reflect this, with expected years of his life lost and, as a result, it will be higher than his chronological age."
Once clients understand their health status, insurers need to focus on how to help and improve their health through rewards and incentives, such as cinema tickets and discounted holidays.
Apart from adding value to individuals, Du Toit argued this could benefit insurers, as the firm noticed members who were more engaged with the programme had much lower claims and lapse rates, therefore, bringing higher margins of profit.
To the wider society, he said higher engagement resulted in lower absence and higher levels of staff productivity.
