Good response to changes: AIA
AIA is seeing good results from its work with the independent adviser market in New Zealand, its chief executive says.
Wednesday, March 4th 2015, 6:00AM 
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by Susan Edmunds
The AIA group reported its results for the year ended November 30.
Value of new business was up 24%, there was 16% growth in operating profit after tax to $US2.91 billion ($3.86 billion) and 14% growth in embedded value operating profit to US$4.535 billion.
Mark Tucker, the group chief executive and president, said: “We have achieved a great deal since our IPO but, as I have said many times before, I strongly believe that we are still at an early stage in a long journey to realising AIA’s full potential. That is a very exciting prospect for our business. 2015 will be our fifth year since becoming an independently listed company and throughout this time we have generated year-on-year profitable growth and made substantial progress in delivering increase in long-term sustainable value for our shareholders. The Board has recommended a 19%increase in our final dividend, a clear reflection of the health of our business, the strong results and our confidence in AIA’s outstanding prospects.”
AIA New Zealand boss Wayne Besant said the New Zealand numbers were fed into the group numbers but a New Zealand result would be available in a couple of months’ time.
“It’s a pretty spectacular set of results for the group, some really big countries have performed well., The China business is delivering some real growth.”
He said New Zealand had had a good year. “We are pleased to be part of a very large and well performing group… in Asia there’s a massive amount of opportunity and we’re very pleased to be part of that. In an industry where there’s a lot of room for improvement there’s a lot of under-penetration in every country AIA is represented in. That gives us a lot of space for sustainable growth.”
He said AIA’s focus in New Zealand was very targeted. Its work with the IFA market was proving very successful, he said. “The service model brought out in the second half of 2014 for the IFA market is giving us very good growth.”
There is also a new commission model that allows advisers to transition between higher upfront commissions and larger trails. “There’s stuff that is going on that is very innovative,” Besant said, “The market is responding positively. For us, we’re continuing to build and engage our distribution and the fulfilment of our capacity with the fast-growing Asian community in New Zealand.”
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As policyholders reach their 50’s and 60’s, price becomes an increasing issue and to make available more cost-effective trauma options is very important.
Perhaps insurers could develop a built-in ‘downgrade’ Option which as a corresponding Benefit and premium reduction when a customer reaches age 55. There needs to be more Options structured into the trauma product.