This is an example of double play: head you win, tail you also win. Yes, a cigarette company is setting up a life insurance business, and will recruit clients by giving smokers discounts.
I explained in the duality element that digital products which thrive are typically both products and platforms. It would be hopeless to build modern digital products without having a moat through platforms. Interestingly, the greatest digital ICT utilities have double plays in their business models: if Amazon decimates many brick-and-mortar stores, it would welcome many online to sell them cloud services. Alibaba welcomes you to its marketplace platforms, and you certainly have signed up for its (partly affiliated) payment processing solutions (Alipay) which command commissions.
Here, Marlboro maker has started a life insurance company called Reviti. I do not expect the premium to be the most competitive in terms of price in the market.
Philip Morris International, the tobacco company that sells Marlboro cigarettes, is getting into the life insurance business.
Called Reviti, the wholly owned subsidiary will initially sell life insurance in the U.K. with plans to expand into more markets overseas. Smokers will receive discounts if they stop, quit or switch to a possibly less carcinogenic product, like Philip Morris’ vaping devices.
On average, people who switch to e-cigarettes will receive a 2.5% discount on premiums, people who switch to Philip Morris’ heated tobacco product iQOS for three months will receive a 25% discount, and people who quit smoking for at least a year will receive a 50% discount, the company said. Premiums for a 20-year-old nonsmoker run about £5 ($6.47) per month for a life insurance policy that pays £150,000 ($194,125). The same premium would buy a £60,000 ($77,650) policy for a 40-year-old nonsmoker.