AIA New Zealand drops life cover rates

Life insurer AIA New Zealand has announced a substantial price change to a major product. From 7 May, it has significantly reduced life insurance costs for most people aged over 30. The change to premiums makes AIA New Zealand one of the most affordable insurers in the market for life cover. This constitutes a big step towards AIA’s goal to help reduce underinsurance in New Zealand, which has long languished near the bottom of OECD countries for life risk insurance.

AIA New Zealand CEO Wayne Besant said, “Every indicator we see is that New Zealanders are looking closely at what they’re spending in every area of their lives. Our new life cover rates have been in development for some time, and they’re the result of looking at the needs of New Zealanders and how we stack up in the market. We’re in a position to offer extremely competitive rates because of the strength of the AIA Group, the fifth-largest life insurance company in the world.” AIA New Zealand is one of the highest-rating insurers in New Zealand and Asia Pacific, with a Standard & Poor’s rating of AA-.

By way of example, under the new pricing, for a non-smoking husband and wife, both with $350,000 in life cover and both aged 40, the total monthly premium will now be $53.81, against an industry average of $63.55 (reference: Chatswood Consulting Ltd – Premium Comparison Tool).
 

Mr Besant says, “We have made our pricing more competitive in general for people aged over 30. This is when people start to really need affordable life insurance – when they come into their 30s they’re starting families and businesses and acquiring debt. They have lifestyle needs to protect, from a more comprehensive plan through to simple funeral cover, and that protection has to be as simple, relevant and accessible as possible.”

AIA New Zealand reported strong year-end results in early 2012: its share of life and risk new business for the year ending 31 December 2011 was 8.4%, placing it fourth in the market (source: ISI (Investment Savings and Insurance Association)). Comparatively, the company ended 2010 in sixth place with a 6.54% share of new business.

Its persistency figures are also on the rise. AIA New Zealand exceeded its 2011 target of 89% for annualised premium retained, reaching 89.5% compared with 87.2% in 2010.
 

AIA New Zealand continues to work at a community level on the engagement programme, and has deepened its existing partnership with Maori Television: the company is the naming rights sponsor for the top-rated AIA Marae DIY during the 2012 series.