AIA is planning to increase premiums for its income protection (IP), wavier of premium, and closed trauma products to counter claim trends and inflation.
The firm says pricing changes are based on its actuarial claims and lapse experience, and adjusts pricing to take account of expected changes in future experience.
AIA last increased IP premiums in 2020, and has seen a gradual rise in IP claims that means it will increase premiums 3%.
“We recognise the ongoing cost of living pressures across the economy and this rate increase aims to solely offset this expected increase in claims costs,” says the firm.
Pricing changes will not apply to waiver of premium benefits on closed AIA products.
Trauma pricing
AIA says to ensure fairness between different groups of customers, individual pricing adjustments may be required to take these differences into account.
“Since 2020, when we last increased our premiums for closed AIA trauma products, we have continued to observe higher level of claims compared with our wider trauma portfolio, and further pricing changes are required to meet these costs,” says the firm.
It intends to stagger increases over the next three years at a rate of 5.2% each year “…unless we see an improvement in the underlying claims experience”.
The following table summarises the pricing increases which will apply to new and existing AIA clients.
| Benefits | AIA Living (new and existing policies) |
Closed Sovereign Products | Closed AIA products |
| Income Protection | 3% | 3% | 3% |
| Mortgage and Income Protection | 3% | 3% | 3% |
| Waiver of Premium | 3% | 3% | 0% |
| Trauma | 0% | 0% | 5.2% |