Things are heating up between insurance rivals Discovery and Liberty.

Discovery claims that Liberty has been using its Vitality incentive programme without permission.

Liberty, on the other hand, claims that it doesn’t need permission.

The companies have now traded legal papers and the battle lines have been drawn in the sand.

Business Insider has more:

Liberty does not believe it has done anything wrong. It openly markets the fact that its life insurance clients can get rewards based on their status “through wellness programmes that Liberty recognises”.

Based on their rewards status at either Discovery and Momentum, which both offer rewards programmes for their own customers, Liberty Life clients can earn up to 40% of their premiums back from the fifth anniversary of their policy onwards.

Liberty argues further that the data does not belong to Discovery, but to their customers.

While Discovery agrees with them on that point, they’ve taken umbrage with Liberty’s use of the rewards system – which Discovery says is the result of 20 years of product development.

“It’s about competition and freedom of choice,” says Liberty CEO David Munro. “We looked at this and didn’t think there was room in the market for another wellness programme, so we asked our customers and they told us they wanted choice, and that is what we are giving them.”

Discovery holds a different view. While it’s happy for its members to use their Vitality status on their CVs and even on social media and Tinder profiles, the fact that a rival is using its intellectual property to compete is viewed as theft. Lawyers use the term “coat-tailing” and Discovery’s legal advice is that a rival may not use its invention to compete, or ride on its coat-tails.

To put it differently, you, as a Discovery Vitality member, can use your data in any way you see fit.

Liberty is using that data to increase the value of their product for their own clients, thereby potentially taking business away from Discovery, and Discovery is not happy about it.

“Those profiles are the result of ten million life years of data and 30,000 mortality events that link back to it,” Discovery Life CEO Hylton Kallner says.

…Liberty says it has taken legal advice that suggests just like Uber and Airbnb, they don’t actually need to own the assets they use for the advantage of their customers.

“The difference,” says Kallner, “is that when your property is listed on Airbnb, it’s because you have requested that it be put there. If your car is being used as an Uber, you have signed up for it to be used for that purpose. We have not given permission to Liberty to use Vitality for their own benefit.”

20 insurers worldwide have Vitality integrated into their own wellness programmes and pay top-dollar for the privilege of doing so.

While Discovery does not believe its global Vitality model is at risk, there is a concern that if its life insurance rivals can simply use the results of the product to incentivise their customers, it will undermine their integrated offerings across health, investments, banking and insurance businesses.

And that, friends, is why Discovery is taking Liberty to court.

[Liberty maintains that their] clients want to be allowed to choose preferred product providers across various offerings and any restriction of their right to do so is in itself uncompetitive.

“Having listened to the needs of financial advisers and clients, we designed the Lifestyle Protector Wellness Bonus to give customers the opportunity to benefit from significant upside when they manage their health in such programmes, but with no downside,” Naidoo said. “We believe our clients can enjoy a ‘best of both’ worlds scenario.”

Discovery will not be taking this lying down.

Momentum seems happy to watch from the sidelines and let the two companies throw down. They won’t be pursuing legal action against Liberty, but are monitoring developments.

[source:businessinsider]