2
WEEKS TO GO TO LAUNCH

Our Existing Customers

AIA VITALITY - What’s in it for our customers?

[NEW] 26 July 2019

AIA Vitality is designed to reward members for engaging with the program.

With AIA Vitality, members not only benefit from better health and wellbeing, they also receive:

  • A discount on their life insurance premium, retained when they reach Gold Status.
  • Up to 300 Airpoints Dollars™, as they progress through Silver, Gold and Platinum statuses.
  • Up to $260 in rewards per year through Active Benefits.
    If members reach their personalised physical activity target each week they can choose between:
    • 5 Airpoints Dollars™
    • 5 New World Dollars loaded onto their New World Clubcard
    • A $5 HOYTS, Harvey Norman or iTunes voucher
    • A $5 donation to the Mental Health Foundation of New Zealand or the Heart Foundation
  • Status-based discounts of up to 50% on up to four Forme Spa & Wellbeing vouchers per year.
  • Great savings like up to 25% off Fitbit and Garmin devices, 25% off JAGGAD performance apparel and 50% off HOYTS movie tickets.

Can existing customers access AIA Vitality?

At launch, AIA Vitality will initially be integrated into the policy system administering the new AIA Living product and most Sovereign policies.

Existing Sovereign Customers

Customers holding the following underwritten products administered on this system will initially be eligible to attach AIA Vitality to their existing cover:

  • Sovereign TotalCareMax;
  • Sovereign Risk Protection Plan;
  • Sovereign Adaptable Term; and
  • Sovereign MajorCare, Absolute Health, and Private Health.

Existing AIA Customers

At launch, AIA customers (and Sovereign customers holding other risk products not listed above) will be required to transfer to the new AIA Living products to access AIA Vitality.

Existing AIA customers holding risk policies issued post-June 2001 and retail health insurance customers (Superior Health and Real Health) can migrate to the equivalent AIA Living products without any further underwriting.

Click here for some FAQs on the AIA Vitality program and Integration.

Enhancements to older AIA policies

23 July 2019

Product enhancements

AIA is committed to delivering good outcomes for existing customers.

We have enhanced the following AIA Trauma, Life, and TPD policies to align with AIA REAL.AIA

  • AIA Trauma Cover (inc. Vital Care) – policies issued since 1 June 2001
  • AIA Life Cover – policies issued since 1 June 2001
  • AIA TPD Cover – policies issued since 1 June 2001

Please note that AIA’s Income Protection policies issued since 1 June 2001 are already aligned to the AIA REAL product range. 

These enhancements will take effect for new claims with a claim event date on or after 1 July 2019.

Extending the pass-back benefit

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. 

We will be writing to these customers to inform them of the product enhancements and the introduction of the pass-back benefit.

Premium increases

Enhancements to our June 2001 – January 2003 Trauma policies have resulted in the introduction of over 20 new full and partial conditions and a modernisation of existing definitions. These Trauma policies are currently about 25% cheaper on average than modern trauma products, which reflect differences in the product design.

In order to meet the additional claims costs associated with the Trauma enhancements, we will be required to increase premiums for these older Trauma policies. To manage affordability pressures, AIA will apply these increases gradually at a rate of 4% p.a. over the next five years (in addition to CPI and ageing increases).

We have carefully weighed the advantages and disadvantages of enhancing our Trauma products from the customer’s perspective and we believe that this approach delivers the best result for existing customers by providing these customers with modern Trauma protection.

To help manage potential affordability pressures, please check out our new flexible replacement rules (above).

What about customers holding other older products?

We are currently reviewing the design and pricing of our older products to ensure that they continue to deliver good customer outcomes. As you will appreciate, there are a number of factors to consider in managing these products, such as:

  • The relationship between the product design and pricing;
  • Affordability – product enhancements generally come at a cost and it’s important to consider potential affordability impacts, particularly for older customers; and
  • Reinsurance – there are often distinct reinsurers supporting legacy products and there is a need to obtain agreement from each reinsurer to obtain support for any product enhancements or changes to replacement rules.

We regularly review and enhance our closed products and replacement rules. Further work is underway to review our legacy products and we look forward to communicating more changes in the coming months.

Here are some FAQs to help you. 

Letting our customers know about some changes 

18 July 2019

As we near our launch date on 5 August, we want to remind you that we will be communicating with customers from 22 July. The communication will occur over a two week period.

The main purpose of the communication is to inform customers of product enhancements and some administrative changes. The communications will include the following information as appropriate to the customer’s policies:

  • A reminder that AIA has acquired Sovereign and our commitment to existing customers;
  • An overview of our recent product enhancements and the widening of the pass-back benefit to some policies;
  • Administrative product name changes;
  • An invitation for customers to update their contact details; and
  • Informing Sovereign customers about changes to banking reference details.

The links below contains the letter templates being used for customers (as appropriate).

We have prepared some FAQs to assist you.

COMMitment to ongoing pass-Backs

11 July 2019

As you will recall from Real News and Hotline communications we have recently introduced enhancements to our product range. This was to broadly align our AIA and Sovereign product ranges with each other. 

Following the launch of AIA Living, we will continue to pass-back benefits to existing AIA and Sovereign customers in line with the existing Enhancement Benefit approach (i.e. customers holding AIA products since January 2003 and Sovereign TotalCareMax products since February 2001). In other words, future changes to the AIA Living product range will continue to be passed-back to these existing AIA and Sovereign customers, as appropriate:

  • Enhancements to benefits common to AIA Living and these existing AIA and Sovereign products will continue to be passed-back to these existing AIA and Sovereign customers,
  • The introduction of new built-in benefits to AIA Living will be passed-back to these existing AIA and Sovereign customers, and
  • Enhancements to an existing benefit not common to these existing AIA and Sovereign products will be given individual consideration.

To keep things as simple as possible, the latest policy wordings for AIA Living and existing AIA and Sovereign products will be available on our website on 5 August.

Replacement rules to access aia living

11 July 2019

Although differences between AIA Living and our existing on-sale AIA and Sovereign products are generally minor, existing AIA customers holding products since January 2003 and existing Sovereign TotalCare Max customers (holding products since February 2001) will be eligible to access equivalent AIA Living benefits without any underwriting.

You will simply need to complete a Business Replacement Advice form available through AIAHub.

We will provide more detailed information about our replacement rules, including for legacy products next week.

commission on replacement to aia living

11 July 2019

Full initial commission is only paid where full underwriting is required to access AIA Living – otherwise, initial commission is only paid where the non-underwritten transfer results in an increased premium.

Commission claw-back will not apply to non-underwritten transfers to AIA Living from our existing on-sale AIA and Sovereign products for equivalent levels of cover.

For example:

Suppose that a customer holds an AIA Real policy issued in January 2019 and pays a premium of $125 per month. If the customer decides to transfer their existing cover to an equivalent level of cover under AIA Living, then:

  • There will be no claw-back of the initial commission paid to the adviser if the new premium is below $125 per month for an equivalent level of cover; and
  • Initial commission will be paid if the new premium exceeds $125 per month for an equivalent level of cover.

What about customers holding older products?

11 July 2019

The starting point to integrating the AIA and Sovereign product ranges has been to maintain our existing pass-back provisions: AIA risk policies issued after January 2003 and Sovereign TotalCare Max policies issued after February 2001. This will ensure that customers holding these products continue to benefit from future product innovation.

We are currently reviewing the design and pricing of our older products to ensure that they continue to deliver good customer outcomes. As you will appreciate, there are a number of factors to consider in managing these products, such as:

  • The relationship between the product design and pricing,
  • Affordability – product enhancements generally come at a cost and it’s important to consider potential affordability impacts, particularly for older customers, and
  • Reinsurance – there are often distinct reinsurers supporting legacy products and there is a need to obtain support from each reinsurer for any product enhancements or changes to replacement rules.

We regularly review and enhance our closed products and replacement rules. Further work is underway to review our legacy products and we look forward to communicating more changes in the coming months

We’re proud of our continued commitment to make a difference in people’s lives and to display our expertise and innovation at the forefront of the insurance industry. Thanks for helping us to achieve this.

Questions? Comments?

Please contact your BDM or email aia@sovereign.co.nz

Copyright © 2019 AIA Group Limited and its subsidiaries. All rights reserved.Confidential and proprietary information. For internal use only. Do not disclose or distribute.