Bitesize InsurTech: yulife
August 3, 2018 Chris Sandilands
yulife is a life insurance MGA that rewards customers for leading healthy lives.
The company was founded in 2016 by a team led by the founding CEO of Vitality Life (formerly Pruprotect). It is based in London and sells its products B2B2C via employers. The firm offers accidental death and protection cover at a fixed monthly cost. Policies are underwritten by AIG.
yulife rewards customers for healthy activities. Activities are recorded via feeds from tracking devices. ‘Gamification’ (the application of elements of game playing like points, levels and competition to products or services – Wikipedia) encourages members to be ever healthier. For example, yulife offers company leader boards and sets employees challenges like completing ‘streaks’ of activity. Members of the team bring experience from the gambling industry.
Rewards are extended in the form of ‘yucoin’, which can be exchanged for rewards from partners such as ASOS or Amazon. According to Sam Fromson, co-founder and COO, the company discovered in customer research that customers were much more excited about partner offers than discounts on their premium.
A core part of the proposition is improved employee retention. Beyond the pure financial benefit, yulife believes it can be a force for good in the workplace. It claims its proposition “empowers employees to be well” which can translate into 31% higher productivity and 27% fewer sick days.
yulife recently soft launched, with a full launch planned for 2018 Q4.
The Oxbow Partners view
yulife is one of only a handful of InsurTechs in the life insurance space. It is all the rarer for being a Distribution InsurTech; most life start-ups are Supplier InsurTechs.
It’s not hard to see what business yulife is emulating. Vitality, a subsidiary of the South African financial services group Discovery, has been enormously successful at building up its lifestyle brand. It has approximately 1 million customers in the UK and operates in Germany via a partnership with Generali. As Vitality customers ourselves, the benefit of being able to offer more than a financial benefit to our employees is very obvious.
The big opportunity we see for yulife is in the customer experience. The success of innovative products and features is by definition uncertain; launching them is only economical if each action is low cost. Few insurers can do this as they are constrained by their legacy IT stack. yulife, on the other hand, can move quickly. Once an idea shows promise, it can be refined and scaled quickly. Their focus on innovating the proposition is evident in their quirky design.
If Distribution InsurTechs ‘win’, it will be because their speed to scale is faster than insurers’ speed to copy. Conversely, if/when this inflexion point is reached, insurers are in trouble and can only resort to expensive M&A.
R&D platforms are a solution used by insurers to accelerate their speed of innovation. These platforms sit alongside core legacy systems and allow insurers to build and launch products quicker. We have advised several insurers on the set up of such platforms.