Aviva Life Insurance Co. aims to boost bank sales with new products that allow simplified underwriting.
In new premiums the subsidiary of London's Aviva PLC was the No. 5 seller of life insurance through banks last year, according to Kenneth Kehrer Associates in Princeton, N.J. Its sales were up 7% from 2002, to $46.8 million.
The new line, AvivaGo 1-5-15, lets bankers use one application for a group of products, including term, whole life, and single premium universal life, and promises a 15-minute response time to submitted applications.
Mark J. McVeigh, the head of financial institution marketing for Aviva, which is based in North Quincy, Mass., said banks like the line because "the process is so simple - it allows them to sell a broad set of products in a fast and efficient way."
AvivaGo, which was formally announced Monday, has been offered through 16 bank partners since May and has gotten a strong response, Mr. McVeigh said. Two new banks have signed on because of interest in this kind of simplified-issue product.
With AvivaGo, bankers ask customers five medical questions that can be answered "yes" or "no." The application can then be faxed to an Aviva underwriter, who faxes back a response within 15 minutes.
Qualified customers who answer "no" to all five questions can be approved; from other applicants the underwriter can obtain more information over the phone at the point of sale.
Handling the additional questions right away can help expedite a decision and reduce the need to order a follow-up medical exam, Aviva said.
Because asking about medical matters can be uncomfortable, Mr. McVeigh said, bankers tend to prefer applications that do not require detailed queries.
"I think the simplicity allows banks to sell more insurance and more banks to sell insurance," he said. Aviva hopes the quicker process and the fact that it is used for a range of products will encourage more banks to sell them.
Kenneth Kehrer, the president of Kenneth Kehrer Associates, said a few other insurers are offering simplified-issue products through banks, including Liberty Life Assurance Co. of Boston and Great-West Life and Annuity Insurance Co. in Greenwood Village, Colo.
But "there aren't that many insurance companies focusing on that end of the market in banks," Mr. Kehrer said. Most tend to concentrate on larger, higher-premium sales, he said.
Bankers like the quicker process, but "the fundamental fact is that simplified issue means the insurance is going to be more expensive," because carriers get less information on which to base their decision and must hedge with price, Mr. Kehrer said. Some customers may be willing to pay more to avoid the hassle of a medical exam, but such services do not fit in with banks that want to offer the most competitively priced products.
Aviva Life was called CGU Life Insurance Co. of America until 2003.
