Gymsurance - Follow up

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A follow up to the previous post

The previous post can be found here:(/ideas/2025/03/14/gymsurance)

I received a lot of feedback and questions from the people I sent it to.

I’m going to try to address each one below. It’s helped me clarify the idea to myself first and also iterate it to make it more sensible.

For the purpose of this post the startups name is Fitsure

Core Concept Clarification

  • Are you going to be an insurer or an insurance aggregator?
    • No, the goal is to be a layer in between customers-fitness centres-insurers-diagnostic labs
    • The play is to be the chief owner of compliant data that can facilitate a great experience for the customer while saving them money and making everyone else money

Future Potential

  • Could this expand to beyond gyms and go to gyms that don’t need memberships like in Gated communities?
    • Yes, it can, while the incentives and cost structures there will be different, there is possibly a pathway to getting there but, it cannot be step 1 since that leaves a lot more to be figured out on day 1.

Comparison with Sweatcoins

  • Have you heard of Sweatcoins? Will this be similar?
    • Sweatcoins - these are essentially the make money while you walk alt-coins that exists online
    • I don’t think they make sense purely from the perspective of how little monitoring they actually do.
    • They’re also super inflationary
    • I don’t think this requires a blockchain based solution.

Insurance Payments to Gyms

  • Will health insurance companies pay the gyms on behalf of the customers? Will the margins work out for them?
  • Are you saying that health insurance companies will pay the gyms on behalf of their customers if they take the insurance from them and meet all the requirements set by the insurance company?
    • The idea is not for health insurance companies to pay the gyms, they may only pay Fitsure a small % for origination.
    • Essentially health insurance companies have an incentive to have a higher number of customers who are healthier and less likely to make insurance claims.
    • They don’t have an incentive to pay gyms anything, but, they may have an incentive to be more attractive to people who are in general healthier.

Gym-Based Discounts

  • Why can’t gyms discount their customers based on their attendance to the gym?
    • They could, but, they lack an incentive and probably have an incentive to do the opposite, discount customers who rarely come to the gym.
    • Additionally, attendance data alone isn’t a reliable indicator of overall health and fitness outcomes.

Incentive Structure Analysis

  • What’s the incentive structure for all the involved parties? Gyms, insurance providers and hospitals?

Before diving into the incentive structure, here are some assumptions based on typical annual health-related expenditures for a “fit” individual:

My guesstimate is that the average “Fit” person has these spends

  • Gym Membership: ~INR 25,000
  • Health Insurance Premium (ages 25-45, in good health): INR 8,000-12,000
  • Annual Health Check-up: INR 7,000
  • Healthy Diet Premium: ~25-30% monthly markup

While this allows for people who are either motivated by default or motivated by circumstance to priotitize their health, my assumption is that this currently, this expenditure appeals to a small subset (~3-5%) of the target demographic.

It leaves the rest of the market untappable since they just might not be able to justify and prioritize an expenditure towards such activities above all else.

Incentives

Gym/Fitness Centre Incentives:

  • Maximize membership sales, especially during peak seasons
  • Secure long-term commitments (6-12 months)
  • Profit from underutilized memberships
  • Upsell personal training and premium services
  • Balance floor space usage to avoid overcrowding
  • Retain trainers through personal training sales over health outcomes
  • Encourage renewals and referrals

Insurance Provider Incentives

  • Maximizing premium collection
  • Reducing claim payouts by targeting healthier populations
  • Retaining policyholders - Focus on retaining existing customers as acquisition costs are higher than retention costs
  • Minimal preventive care focus - Limited focus on preventive healthcare as the timelines are longer than a year for real benefits to emerge and retention is harder YoY due to price shopping, which makes retaining existing policies harder. It’s also hard to quantify how many claims were avoided due to preventative care focus.
  • Group policy focus - Targeting corporate clients for bulk policies at discounted rates

Diagnostic Lab Incentives

  • Volume maximization - Process as many tests as possible to maximize utilization of fixed assets (equipment) to amortize costs
  • Corporate partnerships - Secure high-volume contracts with companies for employee health checks
  • Referral networks - Develop relationships with physicians and other platforms who refer patients for testing

Aligning Incentives

None of these solve for actual health outcomes - i’m not talking about longevity, i’m just talking about general preventative health outcomes with a focus on some metrics and keeping them within a reference range

With this context in mind, I’m just thinking through from first principles on a structure that could allow for most of these incentives to exist, while enabling another one, lower cost due to due risks for the customer.

Instead of paying ~ INR 42000 per year for their health (outside of diet etc), it makes sense to me that there could be a structure through which gyms pay a fixed fee to a platform/service provider who enables them to provide a higher likelihood of outcomes thereby reducing insurance premiums and solves for these incentives as well.

Addressing Gaming the System

  • We’re talking about India- the land of jugaad. How do we prevent people from gaming the system?
    1. Agreed, i think this will need to have a lot of guardrails, i’m not certain exactly what they’ll need to be yet, will have to think through this thoroughly and even then it might not be sufficient.

Customer Profiles and Gym Economics

  • You’ve rightly classified the gym goers. But the gym honestly makes money from people that buy memberships but don’t show up. This is the wrong way to do it but this is how most gyms make money. So is this the right ICP for the gym? The gym may not want too many of the ‘I will pay lesser but come regularly’ members?
    1. This makes sense, but, to clarify, the gym makes money from everyone, whether they turn up or not is upto them. The gym doesn’t force anyone to not turn up.
    2. The regular or motivated gym goer might not be the Ideal customer profile for the gym, but, a regular gym goer is more likely to help the gym retain people / bring more people in through referrals than someone who isn’t.
    3. In a sense, per transaction, this point is partly valid, but, mis-assigns responsibility, but, across transactions, it could play out differently.
  • ⁠% of people purchasing the upsells from gym is still relatively low. So I am not sure if that’s seen as the big incentive for them.
    1. Agreed. I’m suggesting a plan lets call it, that combines a gym membership, a health insurance and a health check that comes with a flat rate, responsibilities and a rebate.
    2. In a sense, this could be an originator of memberships for the gym/a channel for sales for gym memberships as a part of a package.

Insurance Claims Data

  • Would insurers want to part with their claims data? ie % of people claiming insurance? How would this get tracked?
    1. They already do have to share this across all their claims, but, whether they’d do it for a single partner is something i’m not sure of.

Insurance Business Model

  • At a product level, ie per insurance sold, typically, most insurers from my limited research are not making money. They make money from investing the capital. So is there margin to reduce cost of premium?
    1. I don’t know enough about this to answer properly, im going to look into this, there could be several reasons for this.
    2. But, on a fundamental level, taking the gym point above - gym’s make money from customers who don’t turn up <> Insurers make money from customers who don’t claim - hence a clientele that is increasingly less likely to claim is of benefit to the insurer
  • An insurance firm with far wider distribution would bake this into their claims process?
    1. Its possible, but, they’d have to disrupt themselves to do this. It would be easier to outsource the risks to an intermediary.
    2. This could play out in many ways, but, the holding back power of inertia will play a larger role than most.

Fitness Device Limitations

  • Would they even need the gym? Just data from the health device would do?
    1. I agree, Gym is too specific, it could be any fitness activity - provided it is administered in a specific way that allows for monitoring.
    2. Just a fitness device will not do, their accuracy is still suspect - I say this as a happy Garmin user - the numbers can be gamed, especially for activity.
      1. There’s also no reliable way to ensure that User 2 is not wearing User 1’s device
      2. Maybe if its an invasive device, but, that makes this about as ultra-niche as can be
    3. And its possible that this looks even slightly more evolved than just fitness device and activity tracking, with where we are in terms of object detection etc, If a gym could offer you a membership that auto-logged what activities you did by tracking them through a camera/sensors in a way thats verifiable, would you consider that a higher quality of service for the same price?
      1. The overheads would obviously have to be thought through, and would begin to make sense only if doing so led to higher quality and more members in the first place, what the margin is to doing this is something I am not sure of yet.

Network Effects and Scalability

  • How does the network effect kick-in? What would you do for the network effect to kick-in? If you’re the middle layer, the spread is very thin, however you do the math, so volume and distribution is important to win in this kind of an offering
    1. Agreed, solving for multi sided supply is going to be hard here.
    2. My initial thoughts are to solve a problem for Gyms/Fitness centres first - build a FitnessOS that enables any gym to be fully digitally enabled first while solving issues for insurers next, i’ll expand on this at the end.

Fitpass Comparison

  • Have you seen Fitpass? What’s the difference?
    1. I have to admit, I was not aware of Fitpass before writing the first post
    2. A friend sent this to me and I’ve since spent some time going through their content and offerings.
    3. It looks very interesting, and one of their services ticks pretty much every box that I have outlined above
    4. They also have top-tier celebrity endorsements
    5. They’ve focused on tying up with high-quality fitness centres and enabled access to them through their Fitpass membership
    6. They have a Fitcoach service for at home AI led workouts
    7. They have a Fitfeast service for nutrition
    8. They have a Fitfeast service for workout videos (a la FitOn)
    9. They have 2 current offerings on their site
      1. Fitpass 360 and Fitpass 180
      2. They have overlaps, the main difference being free doctor consultations and 2 annual health checkups are included for an additional INR 200/mo
      3. Their annual plan is effectively INR 20000 which gives you access to their national gym membership
    10. They also had a subscription service called Fitpass magnum which offered the following
      1. Access to all gyms
      2. Nutritionist
      3. Medical insurance worth INR 2L
      4. 8 free OPD visits
      5. 2 free health checkups
      6. Add on memberships for 3 other people
      7. Discounts
    11. I’m not exactly sure why they discontinued this service, there’s no real explanation online
    12. My overall thoughts on this are
      1. Its interesting that such a model has been tried out
      2. Its unclear to me at what scale and what level of promotion they tried this
      3. They still haven’t linked the product and cost to the incentives that gyms and insurance providers have.
      4. They have effectively competing incentives
        1. Gyms want to optimize their floor space usage to prevent crowding
        2. They want to retain their existing customers
        3. They don’t measure health outcomes for customers
        4. They ideally want to minimize your usage rate of equipment to increase its lifetime
        5. They want happy customers to refer more customers
        6. Insurance providers want to retain their existing customers
        7. They want lower claim ratios - this screening is mostly lifestyle and demographic based
        8. They want to maximize switching costs and provide higher upsells
      5. There has to be a way to link this together.
    13. I know I said earlier that this might not mean starting a gym, but, if thats what it takes to control for a variable then it might be interesting.

What I think the initial steps to a solution looks like based on taking in all these questions and feedback is this

  1. Speak to actuaries, understand how they see this evolving, what information they’d be looking for to construct an insurance product with the right incentives
  2. Speak to gym owners to understand what a premium gym service could look like where without changing much else they could offer interesting metrics and statistics to their users without the users having to track them manually.
    1. This could be an entry point for a SaaS service for fitness centres/activity centres/gyms that augments the data captured from activity logs, health devices that may solve for the data that actuaries might be looking for.

My initial thoughts on the FitnessOS are as following

  • Administrative
    • Member management
    • User Profiles
    • Workout Tracker
    • Subscription Tracking
    • Session Booking that optimizes for floor space
  • Social
    • View other members
    • Compare workouts
  • Activity
    • Biometric/QR Tracking
    • AI-Powered Cameras/Sensors that track workouts to act as a monitoring layer for inputted info
    • Wearable data sync
  • Rewards and Referrals
    • Easy way to refer people
    • Incentives for hitting numbers
  • Discounts
    • Upsells with discounts that you can access
    • This could include Health Checkups
  • Trainer Management
    • Class Scheduling
    • Dashboards for assigned members
  • Gym switching at a breakage fee to retain data
  • Health Metrics dashboard
  • Insurance Management
    • Offers
    • Premium discounts and rebates based on information collected

The specifics of all of these and whether any/all of this is needed for v1 is still something I’m not super sure of.

I’d love to hear your thoughts on all this.

Please do send them over when you find time.

I’d also love introductions to actuaries and gym owners to get their perspectives.

Thanks for reading

Sainath