AIA targets over-30s with price cuts
AIA New Zealand has reduced premiums by as much as 36% for over-30s as it looks to attract new business in a price-conscious, under-insured market.
Monday, May 28th 2012, 10:32PM
by Niko Kloeten
Reductions vary from 13% to 36% in the "core focus" group of 30-55 year-olds, according to AIA chief executive Wayne Besant.
He said a male non-smoker, aged 40, with a $350K sum assured would previously have paid $38.59 a month in premiums but would now pay $26.34 - a 32% reduction.
A female non-smoker of the same age with the same amount assured would see a drop in premium from $31.85 a month to $25.52.
"These are our most dramatic reductions - in some other cases (younger age groups, smoking etc) we are more expensive - but these are not our target audiences so we only focus on 30-55 where reductions vary from 13% up to 36%."
Besant said over-30s were targeted because they tended to have life events that increased their need for cover.
"We're competitive right through all the age brackets but we're very competitive in that 30-plus age bracket and the thinking is that there are needs for insurance at any stage of life but there are particular needs for over-30s.
"They have families, they get mortgages; these sorts of events start to occur at that time. They might be starting a business so business continuity starts to come through stronger.
"The thinking is to really touch on the affordability at a time when a lot of people need that life insurance cover."
Besant said underinsurance is a huge problem in New Zealand and cost is one barrier for people getting cover.
He acknowledged the price cuts would cost the company in the short term but said the move was designed to bring in new customers.
"Like any entity price is one leverage point; that is why we think there's an opportunity to grow our customer base which is great for any company."
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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