Insuring Happiness

Success is getting what you want. Happiness is wanting what you get. (Dale Carnegie)

Discourses on Happiness are quite in vogue at the moment and can now be found on Ivy League curricula, Ted Talks, and on the ubiquitous social media, however this is not a new fixation. Throughout history humankind has always sought happiness above all else. Aristotle was quoted as saying that “Happiness is the meaning and the purpose of life, the whole aim and end of human existence.” and `Life, Liberty and the pursuit of Happiness` was notably included in the United States Declaration of Independence. But you know that things are getting serious when Oprah Winfrey lists Shawn Anchor, a leading happiness expert, on her 2016 SuperSoul100 list of visionaries and influential leaders; kudos to the Society of Actuaries who invited Shawn to present the science of happiness at their 2015 SOA Annual Meeting … even before he made Oprah`s list.

Clap along if you know what happiness is to you

My first literary brush with Happiness was `the Art of Happiness` co-authored by Dalai Lama and Howard Cutler. This book stood out to me from other happiness discussions that I have subsequently read in that it went to great lengths to emphasize the difference between pleasure and happiness. In summary, pleasure is externally motivated and fleeting, while happiness relates to the mind and the heart, it is internally generated and constant.

Distinguishing what makes us happy and gives us pleasure is not that obvious and will of course be very personal. The difference between the two is important since whilst we should strive to maximize our happiness but we should limit our pleasures. Some obvious pleasures include drugs, alcohol and having a bling-bling lifestyle; an excess of any of these pleasures will never have a happy conclusion. Once again these pleasures will differ from person to person.

From my own point of view owning a Porsche 911 GT3 would indeed be a pleasure. But whilst it might be a nice run around car for an NBA superstar, it would be completely stressful for this car loving author. I could not bear to leave a GT3 with a valet or park it between two cars or think about leaving it on the street. The pleasure of owning such a supercar would dominate me and make me utterly miserable. On the other hand having absolutely no car would make me unhappy since neither Brazilian public transport nor Uber services are very dependable. So having any compact car would allow me to arrive at my appointments on time and thus make me happy; the pleasure-factor kicks in by upgrading the compact to a german luxury car. But not everyone is a motor head.

Sometimes the road to happiness is not pleasurable. When I arrived in Brazil 20 years ago, since I am not a linguiphile, it was definitely not a pleasure to study Portuguese but now being fluent contributes to my happy lifestyle in Sao Paulo. After working as an actuary 7 countries and 9 cities I`ve worked out that for me my profession (being a reinsurer) gives me pleasure but where I reside is an important factor for my happiness. They say that you can categorize locations where people are happy to live; namely the mountains, on the beach or in a city. I`m definitely in the last category and am pretty sure that living in a South American concrete metropolis with 22 million persons would cause great unhappiness for many people.

One of the very few pursuits that gives me both pleasure and happiness is the disciplined preparation for and participation in long distance running events. This year I will participate in 3 marathons and 30+ half marathons. My running watch tracks more miles annually than my car`s odometer. Feeling fit and full of energy is one of the happiest feelings that I am fortunate to enjoy. My blog on this quirky obsession can be found here.

Think different

Advertising agencies are experts at selling the concept of pleasure. I take my hat off to them for successfully marketing cigarettes with dire health warnings, heart-attack-on-a-plate fast-food meals and little plastic bottles of water to an increasingly ecologically aware society.

Let`s consider if the purchase of a life protection, accumulation or divestment (annuity) product will give our clients pleasure or happiness. An objective of buying insurance is to purchase protection from monetary repercussions related to accidents, illness or death. The death of a sole breadwinner could have devastating financial consequences to the bereaved family. Realistically I cannot imagine that the purchase of an insurance product would ever be a euphoric heel-clicking event but having insurance does provides peace-of-mind which is a contributing factor to being happy. Hence I would argue that insurance is a happy oriented product and as such one should adopt marketing techniques that are specifically aligned to a happy outcome.

We cannot copy successful sales strategies used by pleasure mongers such as Moet & Chandon, Louis Vuitton, Chanel or Porsche to offer life insurance. To be fair the actual advertisements used by insurance and investment companies tend to show fulfilled clients in happy settings such as coddling grand-kids, looking at sunsets from tropical beaches and sailing in the Caribbean; photos never show retired clients at pleasure dens such as Las Vegas casinos, St Tropez beach clubs or at the race tracks. If we conclude that our products are not pleasure inducing but will make our clients happy, we must consider how we can successfully deliver this message. We have always heard that money cannot buy happiness but this is exactly the marketing challenge that I am proposing..

The application of Behavioral Economics to Insurance is still in its infancy so there is lots of potential for innovation and creativity. So far there have been three Nobel Prize winners in Economics awarded for research into Behavioral Economics; the study of psychology as it relates to the economic decision-making processes of individuals and institutions. This study amongst other attributes assists in nudging people towards wiser decisions and healthier lives. Let`s consider some ideas that have been inspired by Behavioral Economics;

· Nomenclature of our products. Names such as Dread Disease, Accidental Death and Dismemberment, Terminal Illness benefit etc.. must be rebranded. These descriptions do not inspire feelings of happiness, in fact quite the opposite.

· The sales process needs to be revamped to create a customer experience that`s conducive to happiness or at least be joyful. The customer experience of selling a simple sandwich can be transformed if the server remembers your name, your usual order, puts a smiley face on your receipt and maybe slips in an extra pickle or slice of avocado. Such simple actions transform a seemingly mundane transaction and makes the client feel special.

· Consider where we pitch to clients. Successful time-sharing vacation companies target honeymooners on exotic tropical locations. Disney and Apple are fanatical about the architecture and design layout of their locations to create fantasy worlds for their loyal clients. I`ve seen too many individual life agents pitching to clients at my noisy, crowded local Starbucks.

· Lemonade Insurance allows clients to nominate a charity and provides donations if underwriting profits are favorable. Research suggests that making generosity a regular habit may influence long-term well being and happiness. Thus Lemonade Insurance has created a`happy` link between the purchasing of insurance and contributing to a social good.

· Continuously deliver upgrades. The `sell it and then forget it` mentality that is the insurance industry`s norm has to evolve. The first policy sale to client should be the first step of the insurer-client relationship whose journey will include significant life events such as marriage, kids, change of career status or retirement. If we are committed to accompanying the happiness of our clients, we must accompany our clients with individualized coverages over the long term to ensure that our financial services remain relevant to his needs.

· KYC. Know your client is all the buzz word and we cannot finalize a life insurance transaction if we don`t receive reams of intrusive, personal medical history, ascertain that the sum insured is compatible with income or the named dependents have a legitimate insurable interest. But in our efforts to conscientiously click all of the boxes demanded by compliance, do we ever take the time to discover what actually makes our prospective client `happy`?

Conclusion. Don`t worry be happy

The pursuit of pleasure is pretty obvious, college students book spring break in Cancun for that very reason. Happiness is more elusive and can be staring at you without you even being aware of it. A great example is Frank Capra`s film `It`s a Wonderful Life`. The plot is about a desperately frustrated businessman on the verge of taking his own life on Christmas eve when he meets an angel that shows him what life would have been like if he had never existed. At the end George Bailey, the businessman, realizes that he is one of the happiest men in the town and the film ends with George surrounded around the Christmas tree with adoring friends and loving family.

The actuarial profession must not shirk its duty to serve the public interest and can help insurers redesign coverages that will encourage clients to defer present pleasurable consumption for future `peace of mind` financial security providing a friendly nudge towards the Aristotelian ideal.

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