In what has been a tumultuous year for Australia’s life insurance and financial services industry, riskinfo has identified what it considers to be the three best initiatives launched in 2014:
- Launch of AIA Vitality
- Release of BT Key Person Income
- Synchron Non-Disclosure Video
AIA Vitality
AIA Australia’s new customer engagement program, AIA Vitality, was officially launched in March. The membership program encourages people to take steps to improve their health and wellbeing by rewarding them with tangible, immediate benefits, including entertainment discounts and cheaper insurance premiums.
AIA Australia developed the Australian version of the program in partnership with South African insurer, Discovery, and piloted the offer with a small number of advisers in late 2013.
Risk specialist adviser, Gerard Lowe, who was part of the pilot, said the program was more than just a ‘value-add’ for consumers. “I would encourage other advisers to look at this as a way to change their business models. You’re effectively moving from a business which relies on new sales, to a sustainable, long-term business which can support itself by serving existing clients, said Mr Lowe.
Vitality is the world’s largest science-backed health and wellness program, with over 5 million participants globally, including members in the USA, UK and China. The program uses the latest research in behavioural economics, incentivisation and wellness to stimulate people to take the first steps towards healthy living, and to make these lifestyle changes permanent.
BT Key Person Income
In May, BT launched an Australian-first key person insurance solution for the small business market. Responding to what it said was a significant underinsurance gap in the Australian market BT’s Key Person Income product is presented as an alternative solution to the traditional business expenses cover, and provides a monthly benefit to a business for up to one year, if the business owner or key income-generating staff member becomes sick or injured.
Unlike business expenses insurance, which is used for fixed business expenses incurred during the period of disability, BT’s Key Person Income insurance offer is based on the portion of revenue the business owner generates for the business. Key employees can also be covered for a percentage of their remuneration package. The cover leverages BT’s two-tiered total disability definition, based on its 10 hours and duties criteria. Customers can choose between 30 or 90 day waiting periods, and cover up to a maximum of $60,000 per key person can be selected.
“Small businesses have been able to insure for negative financial impacts if a key person dies, or suffers from total permanent disability or a trauma event,” said Scott Moffitt, National Life Insurance Product Manager, at the launch in May. “These insurance products have focused on severe or permanent disability, yet businesses are more likely to be impacted by short-term disability. Key Person Income is an innovative product that addresses this business need,” he added.
Synchron Non-Disclosure Video
In February, dealer group Synchron released a simple yet highly effective video, designed to inform prospective clients about the risks associated with life insurance non-disclosure.
In clear and simple language, the brief animation outlines to those applying for life insurance the importance of disclosing all potential health issues to their adviser.
This video was released, in part, due to a court ruling in which Synchron and adviser, Russell Harrison, was sued for damages because an act of non-disclosure left a client uninsured (see: Court Verdict Sends Warning to Advisers on Disclosure). Judging by the huge open rate we received when reporting this court ruling, we know how much this story resonated with virtually all advisers, probably because they appreciated the extent to which they could also become exposed under similar circumstances.
Synchron’s independent Chair, Michael Harrison, said that while disclosure may adversely affect a client’s premium, this is a far better outcome than the risk of a claim being denied when the client is most in need. “The video we have developed helps our advisers get that message through to clients and also saves them from having to repeat the same thing over and over to each client,” Mr Harrison said.
Riskinfo congratulates AIA Australia, BT Insurance and Synchron for their thoughtful and effective initiatives in working to enhance the quality of the life insurance conversation with consumers in 2014.
Congratulations to Don at Synchron for the Non disclosure video, great initiative, come on you other licensees lets see more value ad like this.
Sorry, but isn’t the BT Key Person Income simply a carbon copy of the New Zealand Loss of Revenue product, so how is re-branding a product an initiative?
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