Jou nal o Insu ance and Financial Managemen , Vol. 3, Issue 1 (2017) 30-52
*Co esponding Au ho :
aimo. ou ilai[email p o ec ed]
Acknowledgmen :
The au ho s wan o hank D . A o Luoma o his aluable commen s on he manusc ip .
Au ho (s) e ain copy igh o he submi ed pape (Please iew he Copy igh No ice o JIFM).
This wo k is licensed unde a C ea i e Commons A ibu ion 4.0 In e na ional License.
Jou nal o Insu ance and Financial Managemen (ISSN-Canada: 2371-2112)
Cus ome s’ Opinions on Incen i e Based Insu ance
Raimo Vou ilainen a,*, Lasse Koskinen b
a No dea Li e Assu ance Finland
b Uni e si y o Tampe e, Insu ance Science
ABSTRACT
Incen i e based insu ance (o en called sma
insu ance), whe e he insu ed can a ec he
p emium le el and ecei e o he bene i s by he
beha io and choices, is cu en ly subjec o
conside able in e es and p oduc design ac i i ies
by insu e s. To s udy he opinions o Finnish
cus ome s on incen i e based insu ances we se up a
su ey. The esponden s eplied he nonli e
insu ance ques ions a he posi i ely. Li e insu ance
ques ions mos ly ecei ed sligh ly posi i e sco es,
bu p oblems exis . The s uden sample eplied o
he pe sonal li e ela ed ques ions signi ican ly mo e
posi i ely han he senio sample. This unde lines
he di e ences be ween hese cus ome segmen s.
The eal win-win si ua ion ela ed o incen i e based
insu ance was ques ioned by many esponden s
indica ing cogni i e biases. This s udy inds ha
success ul de elopmen o incen i e based
insu ance p oduc s equi es ha insu e s s udy and
es ca e ully hei po en ial cus ome s’ opinions.
This emphasizes he ole o expe imen s and
inqui ies.
Jou nal o Insu ance and Financial Managemen
ARTICLE INFO
A icle His o y
Submi ed 27 Ma 2017
Accep ed 24 Ap 2017
A ailable online 08 Jun 2017
JEL Classi ica ion
C12
G22
I13
M31
O31
Keywo ds
Cus ome Bene i
P emium Ra ing
Sma Insu ance
Ta i Fac o
31 Vou ilainen R. e al. / Jou nal o Insu ance and Financial Managemen , Vol. 3, Issue 1 (2017) 30-52
1. In oduc ion
Wha is he igh le el o he insu ance p emium? T adi ionally, s anda d p emiums a e
alloca ed o g oups o insu ed uni s acco ding o hei a e age beha iou . Fo example, li e
insu ance p emium is de ined acco ding o he a e age mo ali y o he gi en g oup o
insu ed pe sons. In his adi ional o m o p emium a ing membe ship in a ce ain g oup is a
dominan ac o , which is usually accompanied by o he ac o s like age. I is cus oma y ha
insu ed pe sons o he same age ha e o pay he same li e insu ance p emium ega dless hei
li ing habi s (bad heal h o en inc eases he p emium o e en esul s in declining he
insu ance). In ui i ely i is clea ha cus ome s‟ good li ing habi s dec ease claims expenses.
Would i be possible o ake hei li ing habi s in o accoun in p emium a ing, o e en
incen i ize hem o li e heal hie , and hen ewa d hem o doing so? In he same way he
ques ion o incen i izing a cus ome can be posed in non-li e insu ance.
In insu ance p emium a ing incen i es ha e been used o a long ime.
They occu bo h in li e and nonli e insu ance sec o s. Classic examples a e he bonus/malus
p emium a ing schemes in mo o ehicle insu ance. They can, indeed, p omo e ca e ul
d i ing, a leas in heo y. Addi ionally, hey incen i ize a cus ome no o epo mino
claims. This phenomenon is some imes called “pseudo-deduc ibles”; see Ke (2012). La ely
a end has appea ed o incen i ize he cus ome o a ec by he beha iou he p emium a bi
mo e di ec ly. Examples include he e ec o d i ing beha iou on mo o insu ance and he
so-called wellness o i ali y concep connec ed o many li e o heal h insu ance p oduc s.
The la e ones a e o en e e ed o as “sma li e insu ances”, al hough his e m may also
no e o he ea u es like he easiness o buying insu ance.
These ends a e possible because o he use o new echnology o maximize he co ela ion
o a p emium and he co esponding isk, which has adi ionally been one o he mos
impo an goals o insu ance indus y; see Dionne (2013). (E.g. in comme cial insu ance isk
managemen measu es dec ease isk, which makes i possible o educe he p emium also.)
As a conc e e example, Nyce and Ma oney (2011) show ha mo e g anula isk based p icing
p o ides be e incen i es o homeowne s ega ding loca ion and mi iga ion choices.
We ha e chosen his opic as a esea ch objec because incen i e based insu ance can be
ound a many s ages: bonus/malus schemes in mo o insu ance ha e exis ed o decades;
wellness p inciple, ha is, aking in o accoun physical ac i i y and heal h ac o s in heal h o
li e p emium a ing, is a new phenomenon bu i is in p ac ical use and sp eading a ound he
Vou ilainen R. e al. / Jou nal o Insu ance and Financial Managemen , Vol. 3, Issue 1 (2017) 30-52 32
wo ld; and inally, using d i ing beha iou as a a i ac o is s ill a an expe imen al phase.
Besides, i is in e es ing o discuss a subjec which is equally ele an in li e and nonli e
insu ance.
I is also in e es ing o no ice ha he use o incen i es is common in bancassu ance
en i onmen . Buying an insu ance p oduc can be ewa ded in he p ice o bank and o he
insu ance p oduc s; o buying a banking p oduc can esul in a o ally ee insu ance, a leas
o a ce ain ime pe iod. Using incen i es in his way banks and insu ance companies can
a ec hei cus ome s‟ c oss-buying beha iou . This is an impo an unde lying mo i e
behind he o ma ion o inancial conglome a es; see e.g. Vou ilainen (2005, 2006).
2. Li e a u e Re iew
Incen i e based insu ance is a new phenomenon, and i has seldom been s udied on an
academic le el. The ex s ound e.g. in he In e ne a e mos ly ela ed o p oduc de elopmen
o ad e isemen o exis ing p oduc s on he si es o insu ance companies. Ad e ising
e ec i eness o li e insu ance is discussed by Fie and Poose (2016). Theil (2003) inds ou
ha he p inciples o judgemen by ep esen a i eness and men al a ailabili y ha e insu ance
decisions and ma ke ing implica ions. Ma ke esea ch and discussion on possible u u e
p oduc s can also be ound in he In e ne .
Cus ome s‟ beha iou in buying insu ances and a i ude owa ds a ious op ions is ela ed o
psychological economics and expe imen al economics. A undamen al ex book on
psychological economics is Ea l (1988). Hey (2002) and Cox e al. (2015) use expe imen al
economics in he con ex o isky decision making. Rich e e al. (2014) discuss beha iou al
insu ance bo h om heo e ical and expe imen al poin s o iew. Ch is iansen e al. (2016)
s udy policyholde beha iou in heal h insu ance. Policyholde beha iou in a iable annui y
con ac s is co e ed by MacKay e al. (2015).
Lambe e al. (2009) discuss he e ec o i ness- ela ed ac i i ies and medical claims. The
ela ion be ween he pa icipa ion in a heal h p omo ion p og amme and heal hca e cos s is
s udied by Pa el (2010). The connec ion be ween he pa icipa ion in an incen i e-based
heal h p omo ion p og am and hospi al cos s is discussed by Pa el e al. (2010, 2011). The use
o a wellness cen e can be a me hod o p omo e cus ome s‟ heal h, and icke s o a wellness
cen e can be pa o a ewa d in incen i e based insu ance. Cla k e al. (2011, 2013) s udy i
he usage o a wellness cen e is associa ed wi h imp o ed quali y o li e, s ess le el and
heal h beha iou s.
33 Vou ilainen R. e al. / Jou nal o Insu ance and Financial Managemen , Vol. 3, Issue 1 (2017) 30-52
Among ela ed li e a u e in nonli e insu ance one can men ion Bai e al. (2012), who
conclude ha ehicle main enance eco ds p edic au omobile acciden s, Ko man and Nini
(2013) and Fo ss ed (2014), who s udy in o ma ion asymme ies in au omobile insu ance,
and Aa bu (2015), who discusses asymme ic in o ma ion in he home insu ance ma ke . One
o m o incen i e based insu ance is Pay-As-You-D i e, whe e insu ance p emiums a e based
di ec ly on he amoun a ehicle is d i en du ing he policy e m. Li man (2005) s udies Pay-
As-You-D i e p icing and insu ance egula o y objec i es. He concludes ha i ends o
suppo insu ance egula o y objec i es including inc eased ac ua ial accu acy, inc eased
insu ance a o dabili y, educed uninsu ed d i ing, and educed a ic acciden s. I can also
help achie e o he social objec i es, such as educed a ic conges ion and pollu ion
emissions.
Basic p inciples o insu ance business a e widely co e ed by Dionne (2013). Vou ilainen
(2006) discusses a ious aspec s o inancial conglome a es and mo e gene ally mos
p e e ed alliance models be ween banks and insu ance companies. Vou ilainen (2005)
p esen s al e na i e alliance models and c i e ia o he selec ion be ween hem. The p oblem
o sea ching he mos p e e ed alliance model by di e en decision making g oups –
business execu i es, supe iso y au ho i ies and cus ome s – is co e ed by Ko honen and
Vou ilainen (2006), and Ko honen e al. (2006a, 2006b).
Ve hoe e al. (2001) and Kuma e al. (2008) show ha cus ome s‟ inc eased c oss-buying is
o en a goal in inancial alliances. Sou eli e al. (2008) and Eu opean Commission (2003)
s udy c oss-buying in e ail indus ies.
Udoh and Sa a i (2016) show ha banks ha e no done enough o close he gap o
expec a ions om hei cus ome s ega ding hei se ice quali y and e-se ice quali y,
compa ed o wha he ac ual pe cep ion is o he cus ome s.
In he ield o incen i e based insu ances ea ly mo e s can be iden i ied among insu e s o
di e en coun ies. We ha e no ound academic li e a u e on such ea ly mo e s, bu
McShane e al. (2012) iden i y ea ly mo e ad an ages in he ela i ely young ma ke o
long- e m ca e insu ance. In Finland sma li e insu ances ha e been pilo ed by LocalTapiola
(2016).
Vou ilainen R. e al. / Jou nal o Insu ance and Financial Managemen , Vol. 3, Issue 1 (2017) 30-52 34
3. Resea ch Plan
To s udy he opinions o Finnish people on incen i e based insu ances we se up a su ey
consis ing o gene al, nonli e speci ic and li e speci ic ques ions du ing he au umn 2016. The
su ey ques ions a e lis ed in Appendix 1. Al hough hey co e bo h li e and nonli e
insu ance, mos o hem deal wi h li e insu ance. Ques ions ask abou ag eemen o
disag eemen wi h gi en s a emen s (six classes wi h “1=de ini ely yes” and “6=absolu ely
no ”).
The sample was selec ed and con ac ed wi h he help o he s a is ical se ice cen e (TUPA)
a he Uni e si y o Tampe e (Finland). I is an unbiased sample o Finns as o income le el,
bank and insu ance company ela ion, esidence loca ion, p o ession e c. We call his “ he
basic sample”, and he numbe o answe s he e was 127.
In addi ion, a g oup o business deg ee s uden s om he Uni e si y o Tampe e pa icipa ed
in he inqui y. They ep esen young people wi h high educa ion le el and hei numbe was
69. We call his “ he s uden sample”.
The basic sample ep esen s he whole popula ion o Finland while he s uden sample is
limi ed o he Uni e si y o Tampe e. The a e age age is 58 in he basic sample and 24 in he
s uden sample. In o de o ob ain eliable esul s wi h hese ela i ely small samples he
s a is ical es s we e applied o dicho omized answe s (“Yes”=answe 1-3 and “No”=answe
4-6), and he esponden s we e encou aged o gi e a plen y o answe s o open ques ions.
4. Resul s
Basic Sample: Gene al A i udes
The gene al a i ude (six classes; “1=de ini ely yes” and “6=absolu ely no ”) o he
esponden s owa ds he esea ch ques ions was measu ed as he a e age answe s in he basic
sample, see Table 1.
Table 1
Basic Sample : Gene al A i ude

35 Vou ilainen R. e al. / Jou nal o Insu ance and Financial Managemen , Vol. 3, Issue 1 (2017) 30-52
The mos a ou able answe s we e gi en o s a emen s: The bonus sys em in mo o insu ance
is a good p inciple (N1; a e age 1,8); In mo o insu ance he d i ing habi should a ec he
p emium (N3; a e age 2,3); In p i a e household insu ances (like e.g. home insu ance) he
same kind o bonus sys em as in mo o insu ance would be a good p emium a ing me hod
(N4; a e age 2,3); Smoking/non-smoking should a ec he p emium o a li e insu ance (L4;
a e age 2,3).
This means ha he esponden s like he bonus sys em in mo o insu ance, hey also hink ha
he d i ing habi should a ec he mo o insu ance p emium, hey hink ha same kind o
bonus sys em would be good in p i a e household insu ances, and hey hink ha smoking
should a ec he p emium o a li e insu ance. This opinion is s ong. The as majo i y o
esponden s (81 %) hink ha he bonus sys em in mo o insu ance is eally good (answe 1
o 2).
The wo s assessmen was gi en o s a emen : Residence loca ion should a ec he p emium
o a li e insu ance (L6; a e age 4,5). This means ha hey do no accep esidence loca ion as
a a i ac o o a li e insu ance. Again, he opinion is s ong. The majo i y o esponden s
(58 %) hink ha esidence loca ion as a a i ac o would be eally bad sys em (answe 5 o
6).
Fo all o he ques ions, he a e age answe s ange be ween 2,5 and 3,8. Since he answe
scale was 1,…,6 wi h a mean o 3,5, he answe s can be conside ed o be ela i ely
a ou able owa ds he su ey ques ions.
Implemen ing bo h li e and nonli e incen i e based insu ance equi es o en he use o
in o ma ion echnology (IT). Fo example, egis e ing au omobile d i ing beha iou o
physical exe cise o he insu ed is done wi h he help o IT de ices. The accep ance o hese
kinds o insu ances is ela ed o he accep ance o IT in gene al. Vannoy and Pal ia (2010)
examine he adop ion o IT in he con ex o social compu ing. As backg ound in o ma ion,
Venka esh e al. (2003, 2012) show ha age and gende a e signi ican a iables in explaining
IT accep ance.
Basic Sample: Backg ound Fac o s
The di e ences be ween he answe s o di e en esponden g oups we e s a is ically es ed.
The i s compa ison was made be ween emale and male pe sons in he basic sample.
Ou hypo hesis was ha men a e mo e in e es ed in new ea u es han women. Howe e , he
s a is ical es (Table 2) shows ha he only signi ican di e ence is in ques ion G4: I am
Vou ilainen R. e al. / Jou nal o Insu ance and Financial Managemen , Vol. 3, Issue 1 (2017) 30-52 36
con iden ha i I gi e my pe sonal in o ma ion o a bank, hey use i app op ia ely. Thus,
he e is no e idence o ou hypo hesis. This is no in line wi h Venka esh e al. (2003, 2012).
In addi ion, i was obse ed ha men chose ex eme answe s mo e han women, bu we did
no es his.
Table 2
AA = A e age answe o a gi en esponden g oup,
The di e ence o he obse a ions be ween g oups can be:
NS = Non-signi ican
NAS = Nea ly almos signi ican
AS = Almos signi ican
S = Signi ican
VS = Ve y signi ican .
CC con ingency coe icien
Х2 (khi2) es a iable
P andom e o
Di s a is ical signi icance o a di e ence
Tes Pea son‟s Chi-Squa e es o independence
Di e ence be ween he answe s o he gende s in he basic sample (N=127).
Ques ion AA(women) AA(men) CC Х2 P Di
G1 2,6 2,9 0,143 2,6 0,107 NS
G2 2,7 2,9 0,128 2,07 0,151 NS
G3 3,0 2,6 0,007 0,01 0,936 NS
G4 3,0 3,8 0,268 9,78 0,002 S
G5 3,7 3,9 0,028 0,1 0,750 NS
G6 3,7 3,6 0,041 0,21 0.647 NS
N1 1,7 1,8 0,084 0,89 0,345 NS
N2 3,1 2,5 0,14 2,52 0,112 NS
N3 2,5 2,3 0.016 0,03 0,860 NS
N4 2,3 2,2 0,04 0,2 0,657 NS
L1 3,1 3,0 0,027 0,09 0,761 NS
L2 2,4 2,5 0,057 0,41 0,524 NS
L3 3,2 2,7 0,097 1,19 0,276 NS
L4 2,4 2,2 0,075 0,72 0,397 NS
L5 3,0 2,6 0,14 2,52 0,112 NS
L6 4,9 4,1 0,206 5,6 0,018 AS
L7 3,0 2,6 0,106 1,44 0,231 NS
L8 3,7 3,6 0,001 0 0,996 NS
L9 4,0 3,8 0,013 0,02 0,885 NS
L10 3,3 3,1 0,027 0,09 0,765 NS
37 Vou ilainen R. e al. / Jou nal o Insu ance and Financial Managemen , Vol. 3, Issue 1 (2017) 30-52
Nex , he answe s o he esponden s li ing in he Finnish capi al a ea we e compa ed wi h
he answe s o hose li ing in o he pa s o Finland. Ou hypo hesis was ha people in he
capi al a ea a e mo e in e es ed in new insu ance ea u es. F om Table 3 we see ha he
di e ence is almos signi ican in ques ion L8: An insu ance company may ge in o ma ion
abou my li ing habi s o a e he p emium, and he people om ou side he capi al a ea a e
mo e posi i e. The e a e h ee “nea ly almos signi ican ” di e ences whe e hose om
ou side he capi al a ea a e mo e posi i e owa ds new ea u es, and all he o he di e ences
a e nonsigni ican . Clea ly, he null hypo hesis canno be ejec ed, so he e is no e idence o
ou al e na i e hypo hesis.
Table 3
Di e ence be ween he answe s o he esponden s li ing in he capi al a ea o Finland and
he esponden s om o he pa s o Finland (N=127)
CA = capi al a ea, RF = es o Finland.
Ques ion AA(CA) AA(RF) CC Х2 P Di
G1 2,5 2,8 0,098 1,21 0,271 NS
G2 2,7 2,9 0,058 0,42 0,517 NS
G3 2,7 2,8 0,061 0,47 0,494 NS
G4 3,7 3,3 0,152 2,97 0,085 NAS
G5 4,2 3,6 0,107 1,45 0,229 NS
G6 3,9 3,6 0,074 0,69 0,407 NS
N1 1,5 1,8 0,142 2,55 0,110 NS
N2 3,1 2,7 0,132 2,21 0,137 NS
N3 2,4 2,3 0,032 0,12 0,724 NS
N4 2,3 2,3 0,021 0,06 0,814 NS
L1 3,4 2,9 0,06 0,44 0,506 NS
L2 2,6 2,4 0,024 0,07 0,786 NS
L3 2,9 3,0 0,017 0,04 0,849 NS
L4 2,3 2,3 0,055 0,39 0,534 NS
L5 2,8 2,8 0,067 0,56 0,455 NS
L6 5,0 4,3 0,15 2,88 0,090 NAS
L7 3,3 2,7 0,15 2,86 0,091 NAS
L8 4,2 3,5 0,204 5,43 0,020 AS
L9 4,1 3,8 0,042 0,22 0,637 NS
L10 3,5 3,1 0,088 0,98 0,322 NS
In he nex compa ison, he basic sample was di ided in o ou sala y classes wi h bounda ies
1.000, 2.500, and 5.000 eu os. Ou hypo hesis was ha people wi h good sala y a e mo e
in e es ed in new insu ance ea u es. In he gene al ques ions, all he di e ences (Table 4)
Vou ilainen R. e al. / Jou nal o Insu ance and Financial Managemen , Vol. 3, Issue 1 (2017) 30-52 38
we e non-signi ican . In he nonli e ques ion N2 ( he d i en kilome es should a ec he
mo o insu ance p emium) he di e ence is signi ican , and he second lowes sala y class is
clea ly mos posi i e. In ques ion L10 (I would be in e es ed in li e insu ance which would
gi e me bene i s acco ding o my physical ac i i y and li ing habi s) he di e ence was
almos signi ican , and he mos posi i e answe s came om he lowes and he highes sala y
class. Addi ionally, he e was one nea ly almos signi ican di e ence, and all he o he
di e ences we e non-signi ican . The e o e, we ailed o ind suppo o ou hypo hesis.
Table 4
Di e ence be ween he answe s o he esponden s in a ious sala y classes (N=127)
Sala y le el €/mon h:
Class 1 Below 1.000
Class 2 Be ween 1.000 and 2.499
Class 3 Be ween 2.500 and 4.999
Class 4 O e 5.000
Ques ion AA(1) AA(2) AA(3) AA(4) CC Х2 P Di
G1 2,9 2,6 2,7 3,0 0,111 1,53 0,676 NS
G2 2,8 2,6 2,8 3,5 0,173 3,8 0,284 NS
G3 2,9 2,7 2,7 2,8 0,067 0,55 0,908 NS
G4 3,1 3,8 3,1 2,5 0,168 3,59 0,310 NS
G5 3,5 3,9 3,9 3,5 0,117 1,72 0,633 NS
G6 3,7 3,8 3,6 3,3 0,099 1,22 0,748 NS
N1 2,1 1,5 1,9 2,0 0,229 6,74 0,081 NAS
N2 3,6 2,3 3,1 3,4 0,33 15,16 0,002 S
N3 2,9 2,0 2,6 2,8 0,22 6,19 0,103 NS
N4 2,7 1,9 2,6 2,4 0,159 3,21 0,361 NS
L1 2,7 2,8 3,2 3,5 0,14 2,45 0,485 NS
L2 2,7 2,5 2,3 2,7 0,105 1,38 0,711 NS
L3 3,0 3,1 2,7 3,5 0,158 3,11 0,375 NS
L4 2,2 2,3 2,2 2,4 0,089 1 0,802 NS
L5 2,9 2,9 2,6 2,7 0,15 2,87 0,413 NS
L6 3,9 4,3 4,8 5,0 0,194 4,84 0,184 NS
L7 2,5 2,8 2,9 2,8 0,087 0,94 0,817 NS
L8 3,6 3,7 3,5 3,5 0,032 0,13 0,988 NS
L9 4,1 4,1 3,6 3,4 0,187 4,58 0,205 NS
L10 2,2 3,4 3,6 2,4 0,269 9,64 0,022 AS
45 Vou ilainen R. e al. / Jou nal o Insu ance and Financial Managemen , Vol. 3, Issue 1 (2017) 30-52
Li e Insu ance Rela ed Ques ions
L1 In heal h insu ance he same kind o bonus sys em as in mo o insu ance would be a
good p emium a ing me hod.
L2 I app o e heal h decla a ions when buying a li e insu ance
L3 Age should a ec he p emium o a li e insu ance.
L4 Smoking/non-smoking should a ec he p emium o a li e insu ance.
L5 My heal h condi ion should a ec he p emium o a li e insu ance.
L6 Residence loca ion should a ec he p emium o a li e insu ance.
L7 My li ing habi s p omo ing my heal h could a ec he p emium o a li e insu ance.
L8 I is accep able ha an insu ance company ge s in o ma ion abou my li ing habi s o
a e he p emium.
L9 I is accep able ha an insu ance company ge s my heal h ela ed in o ma ion like
blood p essu e, choles e ol le el o BMI o a e he p emium.
L10 I would be in e es ed in li e insu ance which would gi e me bene i s acco ding o my
physical ac i i y and li ing habi s.
L11 I you answe ed 1, 2 o 3 o ques ion L10, wha o m o ewa d would in e es you
(wha would mo i a e you o use his se ice): p emium discoun , discoun om
se ices ela ed o physical exe cise o wellness, ea ning wide insu ance co e age,
possibili y o moni o you own ac i i y, li ing habi and heal h, o he , wha ?
L12 I you answe ed 4,5 o 6 o ques ion L10, wha ac o s would possibly p e en you
om using his se ice: conce n abou whe he igh conclusions a e made based on
his in o ma ion, conce n abou da a secu i y when gi ing heal h in o ma ion, conce n
abou no ge ing any bene i s by gi ing ou my heal h in o ma ion, conce n abou
condi ions o ewa ding being oo complex, di icul y in moni o ing heal h
in o ma ion, conce n abou whe he li ing habi s and heal h a e in su icien le el o
achie ing bene i s, o he , wha ?

Vou ilainen R. e al. / Jou nal o Insu ance and Financial Managemen , Vol. 3, Issue 1 (2017) 30-52 46
Appendix 2: Examples o F ee Answe s
In ques ion L11 esponden s who we e in e es ed in “sma ” li e insu ances we e asked o ell
wha o m o ewa d would in e es hem. He e a e some o he answe s:
P emium Discoun
“I weal h s a us is be e , one can ge a discoun , bu wo se heal h should no be penalized.”
“ 20-30 % discoun om p emiums”
“Ou insu ances ha e been bundled and we ge migh y bonuses al eady now. I do no know i
I could s ill aise hem.”
“Non-smoking discoun -5%, no d inking -5%, no mal BMI -5%”
“Discoun s by changing li ing habi s would inc ease in e es in heal hy li e.”
“Discoun ac o s weigh , s opping smoking, amoun o exe cise and choles e ol”
“Condi ion in ela ion o age would be no ed in p emiums.”
“This would incen i ize heal h main enance”
“Because I ha e li ed peace ul li e wi hou pa ying, smoking and isk ac o s like dange ous
hobbies, I would like o ha e discoun s. My ela i es ha e also li ed e y long li es, which
should be aken accoun as well.”
”A condi ion ca d would be an e idence o physical ac i i y in e e yday li e.”
“A s epwise moni o ing by hea a e”
“A e heal h examina ions he p emium would be adjus ed (dec ease/inc ease)”
“P emium discoun could be 10-30 % conside ing li ing habi s and ac i i y.”
Discoun om Se ices
“Discoun om a gym ca d? I do no know, I use “se ices” o p omo e my wel a e and
condi ion which can be e en ee (na u e, dancing).”
“Discoun o gym would be good.”
“Bonus could also be in he o m o an exe cise ca d (Sma um e al.)”
“I do no ca e, because I spend my spa e ee ime anyway in he na u e whe e I ge bo h
physical and spi i ual well-being.”
47 Vou ilainen R. e al. / Jou nal o Insu ance and Financial Managemen , Vol. 3, Issue 1 (2017) 30-52
“Discoun s om wel a e and condi ion checks”
“F ee condi ion cou se, i one’s condi ion imp o es, no discoun s is needed!”
“Incen i izes exe cise and heal hy li e habi s.”
“Di icul o main ain ai ness be ween esidence a eas”
Wide Insu ance Co e age
” a el insu ance as a side co e ”
“Possibili y o insu ance co e o an elde ly pe son”
Possibili y o Moni o One’s Own Ac i i y
“Don’ he companies o e his se ice al eady now?”
“I am no in e es ed in he con inuous moni o ing o my own heal h.”
“A e y good idea (se e al commen s).”
“Mode n moni o s and cloud se ices make i possible o assess and ollow he le el o he
cus ome .”
“All he es s o be paid by he insu ance company.”
“Possibili y o ollow one’s condi ion is a good bene i .”
“I hink ha e e ybody can “moni o ” one’s condi ion, heal h and li ing habi s by wha
he/she ea s, how spends his/he leisu e ime and wha does o main ain his/he condi ion.”
O he Possible Bonuses?
“F ee icke s o swimming halls and gyms.”
“Badmin on icke s, pe sonal aine sessions”
“Any hing o imp o e condi ion”
In ques ion L12 esponden s who we e no so in e es ed in “sma ” li e insu ances we e asked
o ell wha would possibly p e en hem om using his se ice. He e a e some o he
answe s:
Conce n Abou W ong Conclusions
“Rela i ely small choices in li ing habi s may ge oo high signi icance”
”Does he cus ome submi he in o ma ion co ec ly?”
Vou ilainen R. e al. / Jou nal o Insu ance and Financial Managemen , Vol. 3, Issue 1 (2017) 30-52 48
“Misuse o he sys em”
“The insu ance company would dic a e he in e p e a ions o he da a”
“Whiche e da a can be ans o med o co espond one’s pu poses”
“Medicine is no always objec i e: choles e ol le els can di e e en i he e we e no
p oblems.”
“Insu ance companies ha e only one a ge : o inc ease hei own p o i s, so hey canno
possibly make objec i e decisions in his espec bu use e e y means o inc ease p emiums.”
“He e again doc o s o an insu ance company d aw conclusions wi hou seeing a pe son”
“Li e is ne e o ally p edic able - a smoke can ha e good condi ion and a e y heal hy
pe son may all o a sudden die wi hou any wa ning. In li e he e a e no gua an ees.
The e o e, d awing always igh conclusions is impossible.”
Conce n Abou Da a Secu i y
“Sys ems a e o en down and hacking is inc easing”
“Da a secu i y ailu es p obable (se e al commen s)”
“A c i ical issue, bu , on he o he hand, oo much secu i y p e en s many good de elopmen s
o he sys em”
Conce n Abou No Ge ing any Bene i s by Gi ing ou Heal h In o ma ion
“The insu ance company is he sole bene icia y o he a angemen ”
“The bene i could be o se by he cos s o da a ga he ing, and i would no be seen in he
esponden ’s p emiums”
“Insu ance companies y o inc ease hei p o i s by any means. I do no belie e ha lowe
p emium would be cha ged”
“The e is no sense in ga he ing useless in o ma ion”
Conce n Abou Condi ions o Rewa ding Being oo Complex
“The e is always some loophole o deny a claim”
“Bo h bank and insu ance condi ions a e oo complex al eady oday”
“Cus ome s would be pu in o unequal posi ion”
“Depends on how well hey a e designed. C .Nobel p ize o con ac heo y.”
49 Vou ilainen R. e al. / Jou nal o Insu ance and Financial Managemen , Vol. 3, Issue 1 (2017) 30-52
Di icul y in Moni o ing Heal h In o ma ion
“Who would do ha as i is nowadays impossible o ge o a doc o e en i you wan ed?”
“Taking a blood sample o an insu ance company is by no means a nice idea – in dispu e
si ua ions su ely he companies would win.”
“Wha obliga ions does he moni o ing b ing o an insu ed? How is my heal h ollowed and
how o en?”
”Mode n echniques and medical cen es o e good possibili ies”
“Fai heal h moni o ing is di icul and complica ed”
Conce n Abou Whe he Li ing Habi s and Heal h a e in Su icien Le el o Achie e
Bene i s
“No wo ies” (se e al commen s)
“A pe son’s li ing habi s and heal h change all he ime and i would be di icul o con ol
how he/she would keep he ag eed li ing habi s.
“Only op a hle es could e en in heo y ge small p emium discoun s”
“This could ha e a posi i e e ec (“li ing habi s eno a ion”) o nega i e (a cus ome
changes companies o gi es up he insu ance)”
O he Possible Di icul ies
“D i ing beha iou is up o a pe son him/he sel while a pe son canno a ec g owing old
and ge ing ill. Manda o y sc eening o people’s genome and i s e ec s o u u e people’s
li es is a ho o scena io.”
“People a e classi ied in o unequal posi ions”
“Can a cu ed disease be an obs acle o ge ing an insu ance? Is he p emium going o be
aised?”
“Too pe sonal ma e s should no be disclosed”
“Spo y bu dange ous hobbies could be ea ed mo e a ou ably han obesi y, smoking, e c.
In spi e o heal hy habi s one’s heal h can de e io a e. P emium a ing ac o s should no
include heal h ma ke s like blood p essu e, BMI, e c.”
“I you change insu ance companies o en, hey all ha e you heal h in o ma ion. This is no
good!”
Vou ilainen R. e al. / Jou nal o Insu ance and Financial Managemen , Vol. 3, Issue 1 (2017) 30-52 50
“The de ini ion o heal hy li ing habi s? I insu ance company’s and my de ini ions coincided,
incen i e based insu ance would be OK o me. I he insu ance de ines heal hy li ing habi s
acco ding o he o icial p ac ise, ou iews on heal h and good li ing habi s di e o ally.
Heal hy die is also a hing I would p obably sha ply disag ee wi h he insu ance company. I
would pay mo e o my insu ance e en i I li e heal hy and I am ne e ill, because my iew
di e s om he o icial one. This ac des oys incen i es o me.”
“Fo a young woman p essu es on looks and li ing habi s a e al eady o he wise e ible. I
would eel shocking i some kilos o o e weigh o amoun o exe cise would be penalized.
Many canno do any hing abou hei heal h. This kind o sys em would se people in o
unequal posi ions.”
“Righ li ing habi s a e no a gua an ee o heal h s a us!”
“I am a aid ha a big p opo ion o people a e di ec ed ou side ai ly p iced insu ances”
“In o ma ion will la e be sold u he o a hi d pa y o i will la e be used in a connec ion
which an insu ed pe son could no hink abou when buying a policy.”
“As a as I know, my age is a show s oppe o li e insu ances. A leas he p e ious ones
ha e expi ed. I missed he ain!”
“When buying an insu ance policy a pe son’s ac i i y may ha e been good. In li e, howe e ,
one aces challenges/ad e si y and aking ca e o one’s condi ion ge s less a en ion.
Consequen ly, he insu ance company may conside ha he cus ome has no ul illed he
insu ance e ms ega ding ac i i y. Insu ance companies a e no especially well us ed in
hese kinds o ma e s.”
“An insu ance company has o be an en e p ise and able o ake isks”
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