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[GRTV] AIA rolls out direct life insurance plans

AIA has launched three direct to market starter plans with the aim of getting more New Zealanders covered.

Friday, May 13th 2022, 12:50PM 4 Comments

In a move bound to attract attention from advisers AIA has launched three new digital-only Starter Plans aimed at getting more Kiwis on the 'protection ladder' 

The three new bundled plans - AIA Healthy Starter, AIA Starter Life and AIA Starter Life Plus - are designed for New Zealanders who are looking for basic, affordable and rewarding insurance, offered via a seamless digital solution.

Chief Partnership Officer Sam Tremethick told Good Returns TV the move is not a threat to advisers, rather it is complementary.

He believes over time when these policyholders need more insurance they will be referred to advisers. Also, the policies are simple and when there are areas where advice is needed applicants will be referred to advisers.

He says AIA have a pool of advisers it will refer people too.

AIA chief executive Nick Stanhope says the traditional new business market is in decline since its peak in 2017.

"The 2021 FSC NZ report showed an $80 million annual premium income reduction in new business since then, indicating that around 50,000 more Kiwis are now without sufficient insurance cover."

"The AIA Starter Plans are designed to help New Zealanders begin their insurance journey by offering simple and affordable insurance cover.

"By offering these three new digital-only, non-advice propositions, we believe AIA can help more Kiwis get better protected. As these customers’ needs change, we will offer them the option of seeing an adviser. Together, we can help address the nation’s significant protection gap.”

Tremethick says the new offering is more about getting people insured rather than profit as the average premium a policyholder will pay is $300 a year.

Because of this low number it is a digital-only offering.

Stanhope believes the new AIA Starter Plans complement the full advice channel, by offering those looking for basic and affordable options with a first step into insurance.

“As the needs of our AIA Starter plan customers’ change and become more complex over time, we expect to transition these customers to trusted advisers who can provide specialised cover and tailored advice.”

Stanhope also says AIA will refer clients to advisers when an advice conversation is required as part of the purchasing process.

"Where Plans are not suitable or a customer is ineligible for cover (they have to be new customers), we will pass these customers on to advisers to better understand their individual needs, and explore alternative insurance solutions tailored to their situation.” 

AIA's research says the plans will be "an attractive and rewarding offering for young professionals, tradies and those starting out with families."

“Our research  shows these groups historically do not engage with traditional insurance channels. We know costs of living are rising, but believe these consumers have sufficient discretionary income available each month that they could put towards these more affordable plans offering basic life, rent or mortgage protection with an optional add-on of Specialist and Diagnostic Testing for medical conditions.”

To ensure there is something in the plans for new customers Vitality Starter has been added.

“The inclusion of AIA Vitality Starter is the ‘jewel in the crown’ of our AIA Starter Plans,” Stanhope says. “Supporting better health and wellbeing with weekly Active Rewards, the starter version of the AIA Vitality programme also includes highly sought-after benefits such as the Apple Watch benefit and a Les Mills Gym membership discount, which appeal to our target market.

For more on this new plans watch GRTV.


Tags: AIA

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Comments from our readers

On 16 May 2022 at 8:20 am lifeadviser1 said:
An add for the AIA starter plans popped up in my Facebook feed this morning, and so I thought I would do a quote out of interest.

I selected $300,000 life cover, and $3,000 per month mortgage repayment cover with a 4 week wait and 2 year benefit period. Indicative premium = $142.47 per month.

Premium for the same cover levels through AIA Quote Builder? $125.83 including Vitality fee.

How does this square with the following quote from the article above?

"Tremethick says the new offering is more about getting people insured rather than profit as the maximum premium a policyholder will pay is $300 a year."
On 16 May 2022 at 9:09 am Matron said:
And so it came to pass, unpalatable as it is to Advisers.

This is actually a clear admission from the biggest player in the market that with ever increasing layers of CoFI (and anything else you care to mention), the cost of acquisition for new business has become unsustainable.

The only long-term solution is a fully digitised non-advice model. Within five years this will be the predominant form of distribution whilst the 'meat and three veg' Advisers will fall away.

It also signals another nail in the coffin for dealer groups and super-FAPS. The flip side is that boutique and niche advisory practices with strong marketing should do nicely out of it.

It's a bold move on the part of AIA that will more than likely wrong-foot the other players.
On 16 May 2022 at 12:48 pm lifeadviser1 said:
Further to my earlier comment, I see that the article has now been edited to change "maximum" to "average'. Having now watched the GRTV video I can see that this correctly reflects Sam's comments. The overall impression is that advisers should not be threatened by this direct-to-market offering as these are "low value" clients (my words not his).
On 16 May 2022 at 1:56 pm Sam.Tremethick said:
Thanks Lifeadviser1, and it is great to see you have been having a play in the system.

You are right, in the original article it referenced the maximum premium was $300 per annum, where in fact this is expected to be the average premium.

The article has been updated the article to reflect this correction.

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