No premium increase promise
In part two of Good Returns' interview with AIA's Sam Tremethick he makes a premium promise, talks about commissions and a new initiative to swell adviser ranks.
Tuesday, September 20th 2022, 6:00AM
Tremethick has given a commitment that AIA will not change its life insurance premiums this year.
“Our commitment is we're not changing our premium rates this year and we won't be adjusting them.”
Health insurance is different. “Health insurance rates we will change.”
“I think you can almost set your clock to an annual increase on those, given a whole raft of reasons.”
Tremethick says it can keep life premiums where they are due to prudent underwriting decisions upfront, product design and Vitality.
“We know that Vitality is having a material impact on lapse experience.”
When it comes to commissions Tremethick just wants certainty.
Yes, he is worried about ongoing discussions around commissions; whether they stay, go or even get regulated.
“I think people want certainty. They want to be able to build businesses.
“As long as the discussions are happening, as long as there's a risk of change, then I think it doesn't give confidence to people.
“From my perspective, if we're going to make change, let's be open and front and honest about it, rather than continuing the discussion and kicking the can down the road and having uncertainty for a prolonged period of time.”
Another worry is the low growth of life insurance.
Tremethick is very clear on the need for growth.
“We won't achieve our ambition unless we grow the market.”
“We've got a very strong market share currently, but having a large market share of a shrinking or non-growing market doesn't actually achieve our outcomes. “
One initiative is AIA Starter Plans.
These are simple life insurance aimed at a younger demographic, which will later become a pipeline of leads for advisers.
“We know that there's whole lot of digital natives out there that are looking to research, quote and potentially fulfill their needs now.”
So far AIA has had good traction onto the site. “We've had good conversion, but the pleasing thing is that we've actually been able to generate a fair few leads from it.”
“That to me the benchmark.”
He says it has been a bit of a learning experience, but as the old saying goes you can’t keep doing the same thing and expect different results.
“We'll do things that work and we'll do things that won't work, but we can't just do the same thing and expect the different results.”
While Starter is aimed at that younger demographic, AIA is looking at initiatives for the other end of the market.
He says there may be some specific insurance covers that AIA could provide people at their later stages in life. This would allow them to hold cover for longer, but not necessarily at the same premium rates.
As for the vexed issue of how to get more advisers into the industry at a time when people are leaving, Tremethick simply says: “I wish I knew.”
But it has has some plans.
“We're going to launch an academy. That's not going to necessarily plug all the holes, but again, it helps.”
The idea is it will “help new entrants into the industry, transition, get their education and start to grow.”
He says there's a responsibility on the manufacturers to do these sorts of things.
An ongoing issue is for the regulator, in conjunction with the advisers, to continue to improve the professionalism of the industry and “to make it an industry that people want to work in and want to continue to be proud of.”
“We're there or thereabouts, but I think we've got to continue to work collectively on how we continue to get people out of school. How do we continue to get people actually wanting to put their hand up and be an adviser.”
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