When A Tobacco Company Runs A Life Insurance Business

When A Tobacco Company Runs A Life Insurance Business

Tobacco company Philip Morris runs a life insurance business called Reviti. The outfit offers  discounts to smokers who quit. Smokers will receive discounts if they quit or if they switch to an e-cigarette or heated tobacco device. I gave this in our program discussion board as an example of a playbook which seems out of sync, but if you look deeper, it is a genius call. Yes, the notion of a cigarette company going into life insurance seems weird because data has it that smokers typically do not live long, on average, as non-smokers. But this strategy has nothing to do with life insurance: it is simply owning DEMAND.

This is an example of double play. Provided Reviti focuses on smokers, it can trap those smokers to stay in its ecosystem. If you leave smoking, you need to keep Reviti to get the promised benefits. If you check, that is protection of a castle by Philip Morris, making sure the money stays in the house. In other words, it has simply moved the customer from the tobacco business to the life insurance unit!

But if you do not bank on that, understand that Revisit may be stimulating smoking since it can “reduce” the high premium smokers typically pay for life insurance. If it does that, and sells insurance to them, they can go ahead and be smoking since now, they think if bad things happen, they have life insurance. And because the premium is not biting, they may not think twice before lighting up.

And the big one: to get life insurance, you have to drop your contacts. Magically, once in a while, new tobacco products will show up in emails, explaining innovation in that space. By the time they do all that, a few would quit but life insurance revenue grows!





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2 thoughts on “When A Tobacco Company Runs A Life Insurance Business

  1. So, when will government of Nigeria deploy Double Play Strategy, or is it exclusive to private entities?

    If government can fund/support innovative businesses here, it will help to reduce employment, improve productivity, retain finest brains within the country, and on the hand improves tax revenues; is there a bigger Double Play Strategy than that? It’s a double win for the government, both on goodwill and fatter purse, so why can’t we have sense here?

    Then for our lazy banks, how much of Double Play Strategy can they deploy, such that when they give out loan, they won’t be ‘praying’ for default, rather provide other supporting services to ensure that the borrowers repay and grow; can they come up with viable Double Play Strategy in that space?

    Then for our wretched insurance sector, what kind of Double Play Strategy can work for them? Because they have refused to grow. Can they try selling cars and offering auto insurance, with incentive for good drivers who drive carefully, such that they can return and pick up a new car or at heavily discounted price, as long as they cover specified mileage in their insured car without incidents?

    We have become too lazy mentally in this land, and it’s very disappointing.

  2. Okechukwu Onuchukwu · Edit

    ‘Protection of a castle’:

    One may not necessarily agree with the nature of some businesses but you have to admire their business sense. Finding ingenious ways to keep the money of their customers within their ecosystem is an art.


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