AIA: Underlying premium rate changes

AIA have announced that effective 8 October there will be a number of minor premium increases to AIA products issued from 1 January 2003, and effective from 20 October 2019 for Sovereign products issued from 1 February 2001.

AIA Living premiums have already taken account of these product enhancements and will not be impacted by these pricing changes.

Below is a snippet of the changes:

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AIA new offer updates

Advisers with AIA agency agreements will already have received many details - a commendable level of detail - from AIA in advance of the launch of their new AIA Living offer. I will only summarise it here for news purposes: 

From 5 August this will be AIA's Living range: 

Life Insurance

  • AIA Living Life Cover
  • AIA Living Family Protection
  • AIA Living Accidental Death

Trauma Insurance

  • AIA Living Critical Conditions
  • AIA Living Progressive Care

TPD Insurance

  • AIA Living Total Permanent Disablement

Income Protection Insurance

  • AIA Living Income Protection
  • AIA Living Mortgage and Income Protection
  • AIA Living Business Continuity
  • AIA Living Rural Continuity
  • AIA Living Business Income Support
  • AIA Start-Up Income Protection

Health Insurance

  • AIA Private Health
  • AIA Private Health Plus 

Accidental Injury Insurance

  • AIA Living Accidental Injury Cover

That omits certain less-used products, such as the 'essential' version of IP and Trauma, and the specialists and tests add on (when not part of medical).

The multiple benefit discount is significant: 

Our new tiered Multi-Benefit Discount will apply to AIA Living risk products (excluding health) based on the number of products held by the customer:

  • 10% for two products;
  • 12.5% for three products; and
  • 15% for four products.

The Multi-Benefit Discount applies within product category levels: Life, Income Protection, Trauma, and TPD. i.e A customer who purchases Life Cover, Loss of Earnings, and Mortgage and Income Protection will receive a 10% discount on the basis that Loss of Earnings and Mortgage and Income Protection fall within “Income Protection” product category.

To qualify for the Multi-Benefit Discount, customers are required to hold a minimum $100,000 Life Cover plus a minimum $75,000 Trauma, $75,000 TPD, or $2,000 (monthly benefit) Income Protection.

This is added to any Vitality discount, which could be 10%. It will be interesting to do comparisons with both discounted and un-discounted premiums.

Commissions have also been updated. I won't repeat the entire schedule here, but I will be updating the commission comparison in the next week, (available to institutional subscribers) if you are keen to see the impact. One thing worth highlighting from that change is the removal of any links to persistency and production levels. Asteron Life has recently made a similar change, and I expect that all commission systems will no longer have these links in the future. AIA's comment is below: 

We have taken the view that volume and persistency related commission bonuses drive unnecessary complexity and risk distracting attention away from the important work that Advisers perform for their clients.

Product enhancement pass-backs are also being extended across the range - to older AIA contracts: 

We are also pleased to advise that we have extended the AIA pass-back benefit to include all risk policies (Life, Trauma, Income Protection, and TPD) issued from 1 June 2001. Previously, the pass-back benefit applied to policies issued since 1 January 2003.

That comes at a cost for some holders of older trauma policies, who will have a series of premium increases to bring their premiums into line with more recent contracts. 

Replacement business rules and details about how to do quotes were also included. 

 


AIA-Sovereign health insurance - a couple of big changes

AIA-Sovereign has upgraded medical insurance and although there are many changes, the two big improvements are in the minor surgery definition and the addition of an obstetric care allowance. These result in substantial uplifts in the product score. They weren't live earlier this week - but they are now. Do take a look. 


Product and pricing changes for OnePath, nib, Asteron Life, Southern Cross, AIA and Sovereign

An absolutely huge couple of weeks of changes: 

Pricing:

  • Updated OnePath Mortgage Protection Prices effective 1 July
  • Updated nib health prices effective 1 July
  • Updated Southern Cross health prices effective 1 July
  • Updated Asteron Life and Trauma rates effective 1 July

New Features:

  • Needs Analysis – added Standalone and Accelerated options for existing Trauma and TPD insurance
  • Research report – added a new page at the end explaining the QPR Research methodology

Research:

Completed a big set of changes, with some quite substantial shifts (see more posts later today and next week)

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Eligibility rules:

  • OnePath - Income Protection, Mortgage Protection and Trauma - changes in entry ages
  • OnePath - Income Protection - age limit changed

Adviser agreements - the ones changing, and the ones that aren't - UPDATED

AIA has updated the financial adviser agreement applicable to Sovereign and AIA advisers. The updated agreement includes a requirement to abide by a code of conduct, a revised series of obligations, and a right to transfer the servicing of clients to other advisers. I have been asked by AIA to point out that there is no automatic transfer of renewal commissions for life insurance in this case. Remuneration can only be terminated under a narrower set of conditions. The new obligations appear specifically designed to give AIA the necessary tools to meet the expected requirement to have effective oversight of the actions of financial advisers distributing insurance products on behalf of AIA. The code of conduct information includes a facility for whistleblowers:

"Don't ignore potential fraud or misconduct. If you see something you believe or suspect could violate the law or the AIA Code of Conduct - speak up.

The AIA Ethics and Compliance Hotline is available via telephone or internet 24 hours a day, 7 days a week, worldwide. It is operated by an independent third party, so you can feel comfortable voicing your concerns or reporting suspected violations."

Fidelity, on the other hand, has recently written to advisers to re-assure them that they need not be concerned about changes to either commissions or their financial adviser agreement between now and the end of next year. 

"Commissions won’t be changing ... We’re pleased to say that, unless required by law or regulation, Fidelity Life has no intention of changing our commission structure during the next 12 months to the end of June 2020... Agency agreements remain as is for now... And finally, we currently have no plans to change our agency agreements before January 2020 - at the earliest."

I could happily argue for either proposition. While we have a pretty good idea of the likely requirements of the new regime, it could be said that one should wait, and then make the change. On the other hand, as so much must change with AIA's acquisition of Sovereign, and with many international standards in place - like the whistleblower facility - why not make changes as you are ready to do so? 

No one should expect that adviser terms will remain unchanged for the long-term, however. The Chatswood team has done a gap analysis between several current sets of agency terms and what would be required to meet the FMA's current guide to conduct. Changes to most sets of terms will be required at some point. 


Quotemonster updates

A monstrously big few weeks of development and change on the Quotemonster platform. Here is a list of recent updates: 

Research Updates:

  • AIA Life new policy wording May 2019
  • Sovereign Life new policy wording May 2019
  • Sovereign Mortgage Protection new policy wording May 2019
  • Sovereign IP Indemnity Value new policy wording May 2019
  • Sovereign Loss of Earnings new policy wording May 2019
  • AIA Medical new policy wording May 2019
  • Asteron Remediation Special Events and Child Benefit
  • OnePath Remediation IP, Trauma, TPD

New:

  • The Statement of Advice report now displays an expiry date
  • Asteron Life Trauma now defaults to ‘Trauma Cover with Early Trauma Benefit’ in the Settings window
  • Improved usability on small Apple screens
  • Changed the way company selections work on the Research screen. If you select companies under a single benefit it will not save this selection for other benefits . However, if you choose ‘Package’ first and then select companies it will save this selection for each of the benefits.
  • Added a new option for printing prices from the Benefit Details screen. If you click on the price for a particular company the price details screen now has an option to print out the price for that single company as well as an option to print all price

Improvements:

  • If you are combining providers for Life and Health benefits the health premium will now displays on the Head to Head report
  • Clarified the wording on the AIA Trauma Early Cancer Upgrade option to make it clearer that it is female early cancer
  • Made the Income and Expenses section of the Statement of Advice match the Needs Analysis screen
  • Improved the Needs Analysis Life and IP cover amount calculations
  • Fixed a problem with Adviser Comments on the Statement of Advice
  • Fixed an issue with Head To Head on existing quotes and tidied up the report printout
  • Made improvements to the way customer logos appear on reports
  • Fixed a problem with the research report not displaying the same companies as those selected in the Research screen.

 


AIA update

Since acquiring Sovereign, AIA have been working to market existing AIA and Sovereign products under the AIA brand. It has been announced that AIA/ Sovereign is going to start communicating important brand and product information directly to customers from 20 June. 


Recent AIA Sovereign Product Enhancements

Here is a summary of some of the product enhancements AIA and Sovereign have recently released:

Sovereign Income Protection

  1. Updated the 'Total Disability Income Benefit' definition
  2. Enhanced the 'Partial Disability Income Benefit' definition
  3. Introduced a 'Childcare Support Benefit', a 'Waiting Period Reduction Benefit', a 'Return to Home Benefit' and more

Sovereign Life Insurance

  1. Introduced a 'Counselling Benefit'
  2. Broadened the 'Financial and Legal Advice Benefit'
  3. Increased the 'Special Events TPD / Trauma Facility'

Sovereign TPD

  1. Increased the 'Partial Permanent Disablement Benefit'
  2. Introduced an 'Assistance Benefit' and a 'Suspension of Premium Benefit'
  3. Improved the 'Special Events Increase Facility'

Sovereign Health

  1. Introduced a 'Mental Health Support Benefit', a 'Public Hospital Cancer Treatment Cash Benefit' and an 'Obstetric Care Allowance', plus more
  2. Improved the 'Cancer Care Benefit'
  3. Updated the 'Minor Surgery Benefit'

Sovereign Trauma

  1. Introduced a 'Severe Illness or Injury Benefit'
  2. Updated 40 medical definitions
  3. Added a 'Medical Advancements Protection Provision'

AIA Sovereign Second Set of Product Enhancements for 2019

AIA and Sovereign have released a second set of product enhancements this year. This time for Income Protection, Life, TPD and Health products. 

Here you can view a summary of these enhancements. Updates for QPR will be live on Quotemonster in the next week.


AIA Sovereign target medical advancements with new requirements

AIA Sovereign's new medical advancement provisions apply three key requirements to new diagnostic techniques - in effect they have to be demonstrated as being better than existing techniques, and must be recognised in Australia and New Zealand as such, and diagnose the condition to the same level of severity. With the advent of more severity-based definitions it is clearly important to include severity levels in definitions. 

Sovereign Medical Advancements Wording 24 April 2019