A View from the Top with Herschel Mayers, chief executive of Vitality

I like the lazy dachshund. Averse to exercise. You see him on the Vitality posters on the Underground. It’s a clever advertising ploy because the point is to get you to do more exercise. And the surprising thing – if you look more closely – is it’s all about insurance.

It used to be you bought life or health insurance, stuck the paperwork in a drawer, and then forgot about it, until you got ill or they called for the priest. That has all changed – as Herschel Mayers, CEO of Vitality, explained to me.

Born in Zimbabwe, he was brought up in Johannesburg, and divides his time between South Africa and London. After a few years with Liberty, Mayers co-founded Discovery Life, now the largest insurer in South Africa. He joined forces with Prudential in 2014 to set up Vitality. Now 58, he trained as an actuary, so he’s good at mathematics and statistics and probabilities and improbabilities. But stick with me here, because he is also good at making it simple.

Personal confession: many moons ago I turned down the opportunity to go about selling insurance because I thought of it as too doom-laden and didn’t want to scare the pants off people (“You know you’re going to die, don’t you? Stop kidding yourself, you’d better be prepared!”).

The genius of Herschel Mayers lies in changing the narrative. He has spun insurance around 180 degrees and turned it away from being about dying or getting ill and made it all about keeping fit and well and living longer. He made me feel healthier just talking to him.

Vitality has a so-called “wellness philosophy”, but this isn’t as hazy and airy-fairy as it sounds. You know all those good intentions you blithely announce around New Year and then it all goes to pot until the next round of solemn promises? Mr Mayers doesn’t want you to revert to couch potato.

“Everyone knows that smoking is bad for you and exercise is good,” says Mayers. The interesting question he asks is, “How do you get people to change their behaviour for the better?” His answer is more carrot than stick – or, as it is now known, “behavioural economics”.

This is how it works: you sign up to Vitality. Vitality straight off the bat gives you a 40 per cent discount, providing you agree to go to the gym regularly. And they give you juicy little incentives along the way if you stick by your commitment – free cinema tickets, coffee at Starbucks, an Amazon Prime subscription. The benevolent Mr Mayers is, in effect, paying you to keep hitting the cross-trainer or doing your 10,000 steps every day. The more steps, the less smoking, the better the incentive. Conversely, your discount is “eroded” over time if you slack and go back to your bad old ways.

Can’t I just phone in or email to say how good I’ve been? Mayers has anticipated my would-be cunning deception. “That’s why we give you an ‘activity tracker’. We monitor your good behaviour.” So you actually have to clock in at the gym. They know if your heartbeat goes up or not. “It has to be verifiable,” says Mayers. So don’t think you can just sneak outside and have a quick fag. Such is the joy of social media. “We have daily interaction.”

But, I can’t help wondering, isn’t that a bit tyrannical? “It would be, if we were forcing you,” says Mayers, reasonably enough. “But we’re not forcing you, it’s your choice to buy into the system in the first place. You don’t have to do it. But it makes more sense.”

The logic of the deal is the “shared value model”, developed originally by Professor Michael E Porter at Harvard, a theory Mayers has translated into practice. The Vitality customer or “member” is given a subtle (or not so subtle) “nudge” in the direction of staying in better nick for longer. The value, or benefit, is shared by both the insured – who gets to enjoy life more, both quantitatively and qualitatively – and the insurer, who pays out less on claims.

Everyone is a winner, including the nation as a whole, which gets one more useful and productive citizen to add to the GDP, and the NHS, which has one less chronically ill patient to look after for years on end. “By changing behaviour,” says Mayers, “we want to create additional economic value.”

Call me a nanny-state guy if you will, but, realistically, when you’re up against the proliferation of cardiac-inducing fast food and fried chicken outlets, you need to do something to try and level the playing field. It’s not exactly King Canute trying to hold back the tide, it’s more Canute, or in this case Vitality, providing everyone (or at least the million or so members of the club) with surfboards to skim across the waves rather than just sit there on your backside getting swamped.

“We are making a difference,” says Mayers. “People do go for check-ups and our claims are lower.”

The Harvard-inspired theory is working so well that Mayers has now extended it into the realm of investing or saving. You know that other good intention you have, to put a bit aside from your wages for your retirement? And you know how it would be better to start sooner rather than later, ideally in your twenties? “Everyone knows this, but they don’t do it,” says Mayers. Well, guess who is going to give you a gentle nudge in that general direction?

Vitality’s persuader in this case is a 20 per cent bonus at the end of it, when you collect your pension payout – providing you’ve behaved well and haven’t started too late or withdrawn it all too soon. Makes sense to me, so much so I suggested it to my two twenty-something sons. They scoffed (as is their wont). “But they are offering all these incentives,” I said. “Maybe they could consider paying off our student debt then,” they said.