AIA Australia secures deal to cover superannuation members

AIA Australia has renewed its group insurance partnership with Colonial First State (CFS) for another three years.

The agreement follows a detailed review process and ensures AIA will continue to provide insurance for around 200,000 members of CFS’s FirstChoice Employer Super, Essential Super, and FirstChoice Wholesale Personal products.

Damien Mu, CEO of AIA Australia, described the extended partnership as a chance to support CFS in its ongoing development.

“Over the past three years, we have witnessed CFS’s significant transformation, marked by innovation and growth. We look forward to supporting their continued progress in the coming years,” he said.

Extended partnership between AIA and CFS

As part of the agreement, AIA Australia will continue offering access to its AIA Embrace program, a health and wellbeing platform designed to assist members at various stages of their health journey. The program includes resources for prevention, diagnosis, treatment, and recovery.

Kelly Power, CEO of superannuation at CFS, highlighted the value of insurance within superannuation.

“Our members will benefit from lower insurance premiums and will have access to a full range of health and wellness programs along with digital servicing tools that will make it easy to customise cover and claim,” she said.

Group insurance trends

The announcement comes amid insights from Gallagher’s “2024 Group Insurance Industry Insights Report,” which explored major trends impacting the Australian group insurance market.

The report identifies several shifts in the sector:

• Inflation is raising operational costs for businesses, leaving less room for salary increases.
• Member engagement with superannuation-based insurance remains low, posing challenges for sustainability.
• Employers are increasingly considering standalone group insurance policies outside of superannuation.
• Enhancing employee wellbeing is becoming a key focus to reduce claims and improve productivity.

Matthew Kennedy, executive manager of corporate benefits at Gallagher Australia, stressed the role of education in maximising the value of group insurance.

“As someone who has experienced first-hand the devastating financial impact that major illnesses and injuries can have on families, I am firmly committed to spreading the message to employers about the importance of this valuable employee benefit,” he said.

Adapting to market changes 

Gallagher’s report also noted adjustments in the design of employer-sponsored insurance benefits. Rising claims and premiums have led many employers to shorten benefit periods for income protection, moving from long-term coverage to terms of two to five years.

Life insurance is gaining traction as an employee benefit, though Gallagher reports that only 31% of employers currently include it. This offering is particularly valued in industries such as finance, technology, and professional services, where benefits play a critical role in attracting and retaining talent.