Uni, I've been giving this some thought lately, and honestly I don't think they're ever going to lose, even when looking at this in isolation - ie just the watch and smoothies, not gym savings or anything else. Consider a single member, at R 200 per month for Vitality. Consider that in order for them to start making a loss, the client MUST hit all their targets, every week, and claim 2 smoothies / coffees each and every week. Smoothie is the more expensive option, so let's take that as an example. R45 per smoothie is the most expensive option. So that's R 360 per month for smoothies, and R 200 per month for the watch. R 560 per month for both options. That's the equivalent of just less than 3 memberships "reward" for one payment. Previous figures estimate that the overall level of "active" Vitality members (ie Gold / Silver) was in the region of 15-20%. That is, 80% are not engaging. At all. That means that for every one person who is using it properly, 4 aren't. Now that the Active Rewards has come through, they've seen an approximate 30% increase in overall activity. Let's even increase that by 50% - taking that 1 in 5 to 1.5 in 5 (20% to 30%). Let's apply that to the numbers above. From R 560 spend (by Discovery for a fully engaged individual) per R 1,000 contributions To R 840 spend (50% increase) per R 1,000 contributions. Now, I know that this is by no means accurate, as there are FAR more members not using any of the benefits than I've supposed above, and there are hectic cross subsidisations & savings in place across the board (savings on life policy payouts & reductions in lapse rate & health claims) but the above just shows that even with a 50% increase in "engagement" and a full utilisation of the benefit of the watch and smoothies, the Vitality program still pays for itself. Factor in the rest of the benefits and the other cross subsidisations, and it's even more profitable. I cannot stress how much this actually saves them on an annual basis. Client retention alone is worth FAR more from a profitability standpoint, not to mention the claims reductions. Fact of the matter is - a few smoothies and watch premiums are not going to bother them one single bit. People abusing the system, however, does worry them. It's a behavioural analytics thing for them, and they want the data to be as clean and reliable as possible. That necessitates a dramatic shift from the initial guidelines, which - to be frank - were laughably simple to manipulate. It WILL change in the future, of that I have no doubt. Was it a shift too far from the initial goals? Yes, but the more I think about it the more I think it was a deliberate action. To get as far away from the manipulators as possible, and actually get some clean data from which to build the goals up from again.
