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AIA: COVID-19 update

AIA have sent out a update to advisers covering topics such as supporting clients through financial hardship, temporary enhancements to premium suspension benefits, coverage during suspension and a guide to working remotely to best support clients.

One in particular stands out: 


We are pleased to announce some further enhancements to our temporary suspension of cover options. These enhancements are designed to provide customers with greater flexibility to manage their cover during this period:

  • Customers holding AIA Real risk products will now receive the same favourable treatment of medical conditions which develop during the suspension period as customers holding other products;

I know that some advisers were concerned about the treatment of customers that had conditions emerge during premium suspension, so it is great to have this improvement from AIA.

Click here to take a look.

AIA redundancy benefit

AIA have announced a temporary enhancement to their redundancy benefit for employees stood down without pay.  Stating:

The intent of our Redundancy Benefit is to provide customers with temporary financial relief in response to a permanent, involuntary, and total loss of employment.

In line with that intent and until further notice, AIA will now accept redundancy claims from customers who are stood-down without pay or Government support* for a period exceeding four weeks.

  • To further minimise financial hardship for these customers, the Redundancy Benefit will be paid in advance from the end of the waiting period.
  • Customers must remain stood-down without pay at the end of the waiting period.
  • The Redundancy Benefit will cease after customers return to paid work.
  • Customers who return to work with the same employer and are subsequently made redundant (or are stood down again for a period exceeding four weeks), will be eligible to receive a Redundancy Benefit up to the maximum payment term only.

*Government support excludes unemployment benefits through WINZ.

Click here to read more. 

Partners Life Financial Strength Rating Affirmed by AM Best

Partners Life announce:

"...that as of the 16th of April 2020, global credit rating agency A.M. Best has affirmed Partners Life’s Financial Strength Rating of A- (Excellent) and Partners Life’s Long-term Issuer Credit Rating of 'a-'. The outlook of both these Credit Ratings is stable.

The ratings reflect Partners Life’s balance sheet strength, which AM Best categorises as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

We are extremely proud to receive this affirmation of the strength of our business, and I would like to thank you on behalf of all the team at Partners Life for your on-going support."


Cigna: Product enhancements and new online quote tool

Cigna has announced product enhancements and a new online quote tool effective 11 May. 

The product enhancements will include new level term options to give customers more certainty when it comes to the amount of premiums that they will be paying, and some competitive new rates.

The new online quote tool is said to be simple, fast and intuitive to use. Online training sessions will be available two weeks prior to the launch. They will also supply a video training guide and additional support material. 

ACC to delay invoicing

ACC are delaying CoverPlus Extra invoicing for three months. Although CoverPlus Extra payment plans will be paused, all customers will remain covered at their agreed amount. Customers on a payment plan with an outstanding amount owing may have their next installment taken before being paused. ACC will be in touch if there are any further changes.

Click here to see ACC’s response to COVID-19

Southern Cross pledges $50m to members and business customers


Southern Cross pledges $50m to members and business customers

Southern Cross Health Society has pledged to return $50m to its members and business customers as a result of the coronavirus pandemic.

The initiative is designed to assist the health insurer’s 880,000 members and 4000-plus business customers during a challenging time for Kiwis.

The CEO of Southern Cross Health Society, Nick Astwick, said Southern Cross wanted to do the right thing by its membership.
“Southern Cross is essentially owned by its members and our top priority right now is being here for them and supporting them in the most practical way we can.

“In these difficult economic times and during a period of lower claiming, our pledge is to support our members and business customers. That means keeping money in the pockets of our members and in the interests of equity and fairness, no one will miss out.”

The plan will see a credit based on a percentage of each policy’s premium applied as soon as possible. Astwick said Southern Cross was able to move quickly to provide support in the face of the economic fallout of the pandemic. “As a not-for-profit friendly society, Southern Cross has no shareholders or overseas owners, which means we are in a unique position to focus on making decisions in the best interests of our membership.

“We’re constantly monitoring the situation and will continue to review our position regularly in terms of the ways we can help our members and business customers. We are with them every step of the way.”

The $50m plan is in addition to a raft of financial support measures announced by Southern Cross in early April. These include the ability for members who have experienced a loss of income and are no longer in paid work to put their policy on hold for up to six months, while members who have not lost their income but are otherwise experiencing financial hardship can put policies on hold for up to three months.

Members cannot make claims while their premium payments are on hold.



Income protection: a potential casualty of COVID-19

There is a difficulty in rating income protection products at the moment - the market is changing fast, and not all the changes being implemented by the market are yet formal policy. Decision-making is emergent, cases are being reviewed as they arrive. Economic data which may have an effect on the views of underwriters contemplating, say, the financial underwriting aspects of cover on self-employed businesses (even if the case were submitted weeks ago) is not yet available. Just how substantial the impact on the economy has been is yet to be revealed. We are all, to some extent, guessing. 

Insurers are conservative in their views - they must be - and have to protect first and foremost the interests of existing customers, who expect them to meet claims. Income protection is not, for example, a form of redundancy insurance. What that means is that they are taking considerably more care with underwriting new cases than they would. Partners Life has made the most detailed announcements about their treatment of income protection policies and Quality Product Research Limited has adjusted ratings showing (for subscribers) on Quotemonster. However, this plainly fails to take into account the attitudes of underwriters to the cover across the market: Advisers tell me that variety of measures are being employed on a case-by-case basis: referring cover to reinsurers, reducing cover amounts, substituting indemnity contracts for other contract types, applying exclusions by endorsement, seeking additional financial information, deferring, and declining cases. The extent to which this all remains fluid over the next few weeks or coalesces into a new normal which becomes formalised in changes to income protection product ranges will very much depend on events: how soon we emerge from level four restrictions, more data about the impact on the local economy, and because we are a relatively open trading nation, the state of the economies of our main trading partners.

COVID-19 is most serious for people who already had underlying health impairments. Income protection is similar in that it already had serious problems before the COVID-19 pandemic, and the ensuing economic problems. It is in very bad shape now and we cannot say for sure how the product will fare over the next few weeks. It may never be the same again. 

nib postpones premium increases

nib postponed premium increases, with this notice published on Thursday: 

We’ve postponed premium increases for policies that are renewing in the April to June 2020 quarter. This postponement will apply to increases attributable to both medical inflation and age increases (including policies on five year age bands). Increases will continue to apply for children moving to adult rates and any changes due to a no claims discount.

These will be postponed until July 2020, but we will continue to review.

You will be aware that increase notices will have already gone out to many members who have policy anniversaries in this quarter. We will be contacting impacted members to advise them of the change.