Why rapid advances in medicine and technology are pushing up premiums for life and health cover

Stephen Potter, chief underwriter at AIA New Zealand, says it’s an issue right across the business, from needing to rethink product design and underwriting guidelines to claims management philosophy and pricing.

And because consumers now have access to information and treatment options on an unprecedented level, insurers need to meet community expectations around products and services, Potter told a recent webinar organised by Financial Advice New Zealand.

“With all that information comes an expectation from people who purchase our products and services that we do more and do better while trying to keep the price relatively stable. That community expectation, and what is demanded of us, is increasing.”

For example, community expectation, along with more advanced treatments, forced AIA to update its definition of a heart attack. The old definition required a full blockage of the coronary artery, leading to disputes between insurers, policyholders and cardiologists as the insurance definition differed from the medical definition.