How Britain's most generous rewards scheme fell apart

Telegraph

2 days ago

When Nick Thomas and his wife took out a health and life insurance policy with Vitality four years ago, like millions of others they were drawn to the generous rewards scheme.
Unlike a traditional rewards programme where repeated spending eventually leads to a perk, Vitality rewarded members for having healthy lifestyle habits.
Walking 7,000 steps a day, going to the gym or completing a Parkrun all earned points offering lucrative rewards for Thomas and his family such as free cinema tickets, an Amazon Prime membership and bags of Caffe Nero coffee.
The scheme was a success on both sides. For Vitality, healthier customers claimed less while members benefited from better health and significant savings in the form of numerous perks.
Thomas, like countless other members The Telegraph has spoken to, has nothing but praise for Vitality. 'It's been brilliant. I've encouraged other people to sign up because I've been so impressed with it all.'
But all of that changed last month when Vitality decided to 'level up' its reward programme.
Rather than earning rewards solely for healthy lifestyle choices, the insurance provider introduced a game whereby members would have to find a cartoon dachshund called 'Stanley' hidden behind 16 bushes. The monthly rewards they now earn are dependent on how many 'Stanleys' they find.
The disapproval among Vitality's 1.9 million members has been swift. Online message boards reveal an avalanche of complaints about the 'silly game'. Facebook groups show members venting their frustrations and trying to share tips about how to find the hidden dogs.
Criticisms range from members saying they feel infantilised to more serious accusations that the game amounts to a form of gambling, and is at odds with the company's aim to reward 'being active, eating healthily and maintaining good mental health'.
Vitality strongly disputes the allegation that it amounts to gambling, as members do not stake money while playing. Martyn James, a consumer expert, says while it is not a form of gambling, it is part of a growing trend of 'gamification' – the process of using gameplay to make tasks more attractive and encourage engagement.
He says: 'Unless Vitality can demonstrate that the odds show that people are getting the same amount of rewards then it's a smokescreen to hide the fact that benefits have been removed.
'That's before you consider the juvenile factor. It's fine if you are younger and don't mind hunting for a cartoon dog but as a grown adult, I find that quite patronising. I don't mind spinning a wheel every now and then, but you have to question what purpose does this serve?'
The Telegraph is aware of numerous members who have written to Vitality to complain, but so far the company has shown no signs of reverting the changes in responses to these letters.
Thomas is one such member who has flagged his concerns with Vitality. 'I wondered if it was just me who was getting annoyed but looking online, I thought thank goodness it's not just me.
'My wife and I joined after we sat down with a financial adviser and we were drawn in by a policy that rewarded healthy living. That's why a lot of people join it.
'But with this they have created a childish game which is completely based on luck. There is an unfairness to it all. I can earn 160 points in a month [the maximum] and end up with fewer rewards than someone who has earned 48 points.
'I'd love for them to be transparent. If they need to cut costs and therefore reduce the number of benefits, just be open about that. Equally, if they need to increase costs because of the level of benefits, it's best to be open and transparent with members rather than doing [this] which annoys people.'
The changes to the reward programme are complex. Previously, members were able to earn up to 160 points in a month with weekly and monthly rewards available.
For example, if members earned 12 points a week, which could be achieved by walking more than 7,000 steps for four days, they could redeem a drink of their choice at Caffe Nero.
For 12 points, they could also enjoy a weekly film rental from Rakuten. Earning 48 points in a month unlocked a free cinema ticket at Odeon or Vue, and until January 2024, reaching 160 points every month gave you a free Amazon Prime membership.
Under the new system, some health-based points rewards remain. Earning 12 points in a week can be transferred for either a free Caffe Nero drink and 25pc off Itsu food or 50pc off a cinema ticket.
But rather than incentivising members to earn as close to the maximum number of points as possible in a month to reach the best rewards, these are all now linked to playing a computer game where luck determines what prizes you earn.
As long as a member earns 12 points each week out of a maximum of 40, they are entered into the game where they are shown 16 square tiles known as 'bushes' – behind four of which is a dog.
When members open the game, the first bush shakes to reveal where the first dog is hidden. It then leaves members with three chances to find three dogs hidden behind 15 bushes.
At the end of the month, if a member finds four dogs, they earn one reward, if they find eight dogs, they earn two prizes and if they find 10 dogs, they earn the maximum of three prizes.
David Rowe, a programme manager from Hertfordshire, has reluctantly played the game each week. However, both last month and this month, he has found seven dogs, leaving him one short of collecting two prizes.
Márton Balázs, a probability professor at Bristol University, explains there is a good reason why members like Rowe keep falling short of earning two prizes.
Balázs has calculated that assuming a member played the game four times in a month and they always find the first dog which the game prompts, they have only got a 13.4pc chance of finding eight dogs.
To earn three rewards, equivalent to finding 10 dogs, the odds of winning are even smaller at 0.96pc – giving members a one in 103 chance of winning the maximum prize, although Vitality strongly refutes these calculations.
Rowe added: 'I looked up the chances of finding all four dogs and you've got a one in 455 chance. You are almost five times more likely to match three numbers in the National Lottery than find all four dogs in a week on this game,' he says.
Rowe, who has been a member for the past eight years and pays £600 annually for his policy, is considering leaving.
'My policy is up for renewal in September. I will investigate changing and see what else is out there. If I can get an insurance policy that is half the price of what I am paying now, I'd think, 'Why would I not do that because that money I'm saving I can just spend on cinema tickets or an Itsu meal instead?'.'
Thomas and his wife are also considering the value of their £1,460 annual bill, but he is hopeful that Vitality might yet listen to the rising anger of members. 'I've never questioned leaving before but if things haven't changed by August or September, then I think we'll go elsewhere'.
A Vitality spokesman said the scheme continued to offer 'significant value' to consumers.
Nick Read, managing director, said: 'The update to the Vitality Programme ensures more customers are taking steps to improve their health, with over 53,000 additional members now more physically active than they previously were.
'The impact of this is transformational – many more people will live in better health for longer. It also continues to offer significant value, over and above the market-leading health and life insurance we provide.'