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Asteron has change of heart

Asteron is set to adopt a new, broader definition of a heart attack in a change the company said could result in a 30%-50% increase in the number of claims paid out in relation to heart attacks.

Friday, April 20th 2012, 6:42AM 5 Comments

by Benn Bathgate

Asteron Life managing director David Carter said that as medical advances mean more events are diagnosed by doctors as heart attacks - yet still aren’t classed as payable events - the change would also help restore consumer trust in life insurance.

“Research in both New Zealand and Australia, when you dig into it you’ve got consumers who don’t trust the life insurance industry,” he said.

“It’s hard to justify to people why we don’t pay claims for a heart attack. Your doctor says you’ve had a heart attack so it’s probably hard to understand why it’s not classified as a payable event.”

He said that at present, the insurance industry has typically required pre-determined ratios and severity levels to meet heart attack definitions before a claim is paid, resulting in many people with trauma policies being denied payouts.

While he said the increased amount of payouts would cost the company in the short term, he believes the changes will help the company grow market share in the under 40 age group - which accounted for just over a third of all heart attack victims last year.

“We haven’t been great at speaking to the under 40’s, that reflects an older adviser force and a range of things,” he said.

“Yes, it will cost us some money, we will not recoup it through premium rises, but we expect the market to grow and we’d like to be part of that growth.”

He said the new heart attack definition would be applied to all new business applications received on Asteron’s current trauma offer from Monday 16 April ahead of the launch of the enhanced offering in July, with the new benefit applying for three months beyond the current stand down period of 90 days.

Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz

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Comments from our readers

On 20 April 2012 at 9:13 am Just a Thought said:
I'm all for broader definitions that create less confusion and reduce mistrust, although this is likely to create another issue in that premiums will need to rise significantly to reflect the massive (30%-50%) increase in claims. I just wonder if there could be a way to have tiered benefit payments reflecting the severity of the condition? Obviously if someone has a mild heart attack and is back at work in a week or two, it's hardly life changing so the need for insurance is minimal, versus someone who has to give up work and go through a long recovery period. Perhaps we would be better placed to educate people about the reasons for insurance and why there are restrictions in place (i.e. it's a backstop and is priced accordingly)? It's not a lolly scramble after all.
On 20 April 2012 at 11:17 am Snoop said:
This is stupid. This is just going to increase the cost of trauma insurance.
On 20 April 2012 at 11:57 am Anon said:
The justification for the changes are extraordinary "help restore consumer trust in life insurance". What if a client has non-malignant skin cancer - include that also as a legitimate claim to restore consumer trust?
On 20 April 2012 at 12:05 pm King of Loss said:
It's worth pointing out there is already a company out there with a much "broader" heart attack definition than what is industry standard whose premiums are not any higher than the market.

Knowing is half the battle.
On 20 April 2012 at 3:48 pm moy said:
King of Loss - I dont think so. Who?
Commenting is closed

 

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