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!