Adviser feedback spurs AIA coverage updates

AIA NZ's recent overhaul of its trauma buyback options gives customers a new 60-day window to reinstate their critical conditions and/or life cover immediately after making a full critical conditions claim. It has also expanded its out-of-hospital cardiac arrest definition to include more types of evidence.

The changes, which took effect in May, apply retroactively to existing policies dating back over two decades. With a high cost of living and insurers straining under rising medical costs, AIA says its updates aim to “make sure that insurance is affordable.”

"We know that many of you [advisers] have been asking for these types of enhancements. We have listened, and we are on the move with you," says Aaron Gilmore, AIA national sales manager for retail.

The enhancement work by offering customers the choice of two reinstatement options for critical conditions cover after a claim immediately (within 60 days) or at 12 months. For cancer claims, customers who reinstate immediately will have a 12-month exclusion on all cancers from the original claim date.

Customers reinstating their life cover have the option to reinstate immediately or at the existing condition dependant 6 or 12 month period. For those choosing immediate reinstatement, they receive accidental death coverage only for the reinstated life cover during the applicable initial 6 or 12 month period, with full coverage resuming afterward.

“That’s a special thing that we can offer, and we’re happy to support you with those conversations. With your financial advice, your clients will know that they’re choosing the best solution for what they need.”

Sums insured on the rise
The product changes have come as insurers face mounting pressure from rising healthcare costs and claim volumes. Travis Higgins, AIA's head of claims, said the challenge is sector-wide and substantial.

He also noted that due to inflation, AIA’s sums insured have naturally gone up.

“We're not the only health insurer in the market that’s been challenged by increasing costs and increasing volume,” Higgins said.

“A lot of our products are tied to CPI, which does obviously increase the sums insured on an annual basis. Then you have special events increases, which is tied to things like having a baby. This means that we are starting to see sums insured increasing over time.”

AIA is also targeting what it sees as the root causes of claims. It cited its 2021 5590 research, which showed that five modifiable behavioural factors - smoking, unhealthy diet, lack of physical activity, excessive alcohol consumption, and environmental interactions - contribute to 90% of deaths in New Zealand for under-70s.

Gilmore said that AIA’s wellbeing program - Vitality - has been designed to tackle some of these issues, and the insurer has long seen it as a win-win.

"You can almost draw the line from those modifiable behaviours through to the non-communicable diseases," Gilmore said.

"I know that for some of my dear friends, some of these choices have gone on to become real issues for them. But I've also had friends who changed those modifiable behaviours and have started to see some changes."