Protection advisers have told Health & Protection that they hope Aviva will retain “unique” aspects of AIG UK’s offering following the insurer’s £453m acquisition of its rival firm.
This morning Aviva announced it had wrapped up its deal for AIG Life UK from Corebridge Financial.
The deal sees another major player leaving the protection insurance market and follows on from Canada Life’s November 2022 exit from the individual protection market and Royal London acquiring Aegon UK’s individual protection book a year ago.
Unique aspects
Commenting in the wake of yet another insurer leaving the market, Alan Lakey, director of Highclere Financial Services and CIExpert told Health & Protection he hoped unique aspects of AIG’s offering would be retained.
“It is always sad when an insurer leaves the market. Aviva’s history is of absorbing other insurers, although when they bought Friends Life they effectively took on their CIC product and dispensed with their old plan.
“We don’t yet know how AIG will be integrated, but it would be a shame if the unique aspects of the AIG offerings were discarded.
“The AIG system is one of the easiest to use.
“Also, they have always been brave and innovative – particularly with the harmonisation of critical illness conditions into headings as opposed to individually named conditions.
“It would be nice to see these aspects retained.”
Contracting market
Roy Mcloughlin, director at Cavendish Ware, told Health & Protection that it was “sad” that another protection insurer has disappeared from the market as a contracting market in terms of choice was “worrying”.
“That said I believe many advisers were relived to hear that Aviva were stepping in as a respected home and also a safe proverbial set of hands,” Mcloughlin continued.
“AIG were a pleasure to work with some excellent people and they will be missed greatly. I would anticipate that some of the great innovations that AIG were responsible for will be continued both in the group and individual markets by their new parent.
“What is vital is that the general advisory population see the positive messages that no doubt Aviva will be communicating regarding the stability of protection, which as we know should be at the core of all holistic financial advice.”
Mike Derham, managing director at Your Life Protected, said he saw today’s news as a “negative”.
“In an already shrinking protection market, losing another big player not only reduces competition, but reduces the options for those with medical conditions who may have been unable to secure better terms from other providers,” he added.
Another option gone
For Richard Brough, sales manager at The Insurance Surgery, this morning’s developments have proven a mixed bag.
“Every insurer has a unique underwriting philosophy – so the larger the panel of insurers to choose from, the more beneficial for clients,” Brough told Health & Protection.
“This will be yet another option gone. For me this is a concern as AIG’s standard premiums are generally lower than Aviva’s, rising prices for the consumer.
“A big positive of AIG is they have a bigger portion of applications where cover is offered straight away.
“We find Aviva write out more for medical evidence involving doctors reports for certain conditions – this can delay the client obtaining cover on average by about four weeks
“AIG is the only mainstream company that offers expat life insurance where a client living abroad can still obtain life cover if they have a UK liability (UK mortgage, dependents living in the UK still, IHT)
“AIG is particularly good with certain conditions like diabetes, blood pressure and cholesterol, heart attacks, MS, and different mental health conditions so it would be good if Aviva retained AIGs stance on these conditions.”
Miles Robinson, director at Home Group Financial, told Health & Protection more generally his view is that this is not something new as providers grow and evolve through acquisitions.
“In my experience this normally creates a competitive landscape for providers to review their propositions which can only benefit the consumer,” Robinson continued.
“It’s unlikely to have an adverse effect with ‘less choice’. I’d prefer to have larger and secure protection providers with strong propositions and claims history etc. than simply a wider-choice with slight variations when recommending protection to our clients.
“I believe there is already a wide-choice in terms of providers and value-add benefits that different providers offer.”
Smart Health missed most
Dr Sheun Oke, CEO at Emergenzz Financial Services (pictured), told Health & Protection she felt consumers keep having lesser and lesser choices with the mergers and acquisitions, and would miss AIG’s Smart Health app most.
“What I will miss most about AIG? Smart Health. I believe Smart Health was an industry disruptor.
“The free app gets clients seeing a specialist in minutes at their own convenience on a simple app.
“I remember the first time I used it for my then 13-year-old daughter. I got a call from her school that she was our of breath.. gasping for air. I was alarmed.
“I called my GP and there was no appointment left for that day. I was advised to go to A&E. We all know that’s the whole day’s income lost as an entrepreneur (that’s over eight hours average wait).
“I remembered the Smarthealth app. So on my way to pick her up, I simply booked a video call and by the time we were home, I had a professional on video allaying my fears and hers.
“I know other providers have now risen to the challenge by offering these services but AIG did lead the way.
“I will personally miss them in the market place and I know I speak for lots of advisers too.”
Very concerned
Emma Astley, owner of Cover My Bubble, told Health & Protection she was “very concerned” in regards to the acquisition, as AIG have an “amazing” proposition for clients.
Astley asked whether Aviva will introduce the valuable benefits that AIG provided including:
- Pregnancy complications (bump cover) such as disseminated intravascular coagulation (DIC), ectopic pregnancy, hydatidiform mole, placental abruption, eclampsia (excluding pre-eclampsia), or foetal death in utero after at least 20 weeks gestation
- Birth defects conditions like cleft lip, cleft palate, club foot and hip dysplasia
- Unlimited GP appointments as currently Aviva only offer three GP consultations per year were AIG’s is unlimited
“I really hope the people making the decisions at Aviva will implement what AIG have been offering for families and improve their propositions for all new and existing policy holders,” Astley continued,.
“For families looking for protection, the market is shrinking so I am hoping that the Consumer Duty legislations forces more insurers to introduce the same benefits and give enhanced options as the above.
“I would be very disappointed if Aviva chose to take away such benefits within the cover and not look to enhance their offerings for clients.
“It’s going to be interesting to learn how this will affect our future clients, so I will be keeping a close eye on the changes moving forward.”
Andrew Wilkinson, director at Moneysworth, added: “We will have to see what Aviva choose to do going forwards with AIG.
“However, on the back of other insurers leaving the market over the last year or so, our main concern would be if Aviva choose to close AIG’s proposition and especially their USPs.”