Over the last six months, Aviva have maintained their position of one of the market leaders in the critical illness market. Their coverage for adults remains strong, however the increasing competitiveness in children’s cover has seen several insurers come to market with stronger child propositions. Today sees Aviva reacting to this competition, by enhancing by their adult and child cover, but what impact does this make on their market position?
Perhaps the biggest change Aviva have made is to remove the child exclusion they previous had on Diabetes Mellitus Type 1 within their Upgraded children’s offering. This is the highest incidence condition for children and a number of Aviva’s competitors offered the definition. The removal of the exclusion has a dramatic affect on how we score Aviva’s children’s cover as seen below
These scores uses out doctors analysis of children’s critical illness. The results are based on both a male and female child born today and takes into account the conditions they are most likely to suffer from during a 20 year period.
In addition to including Diabetes for children, Aviva have also extended the age at which children are covered to. Previously, the maximum age was 18 or 21 if the child was in full time cover. With a number of providers now offering cover to age 22 or beyond it is good to see Aviva extend this, albeit only for the Upgraded child proposition.
In terms of adult coverage, Aviva have added two new conditions to their Upgraded proposition to cover brain abscesses (with specific treatment) and less severe third degree burns. The brain abscess definition will pay the full amount of the sum assured whilst the less severe third degree burns will pay the lesser of £25,000 and 100% of the sum assured.
All insurers cover “severe” third degree burns however, the “less” severe third degree burns definition adds a relatively high incidence condition which only a few providers cover and to wide ranging degrees. To qualify for this condition the client would need to have a certain percentage of either their body, face or head affected by the burns.
For severe third degree burns all insurers specify a percentage of the body and face that must be affected, however a number do not specify the head. The table below highlights for each insurer the percentage of the body, head or face that need to be affected by the burns to qualify.
The lesser percentage the better.
In terms of less severe third degree burns, currently only 7 insurers offer a definition. Like with the severe definition, the percentage of the body, head or face affected differs considerably among the providers. Of the 7 insurers only Aviva, Old Mutual Wealth and LV= specify the head and Aviva’s new definition which covers clients if 5% of the body or 10% of the head or face are affected is the strongest in the market.
As well as adding new definitions, Aviva have also added a hospitalisation benefit to their Upgraded plan. The hospitalisation benefit mirrors what they offer within their Income Protection plan and will pay £100 for every consecutive night a clients spends in hospital for a maximum of 30 nights. To qualify the client needs to have spent 7 consecutive nights in hospital after which the benefit will start to be paid from the 8th night.
Although until now hospitalisation benefit has only been offered on Income Protection, it is a valuable benefit for critical illness clients too. The costs clients and their families can incur when hospitalised for a period of time can be considerable and this benefit can help clients meet these even if they are not suffering from a condition they can claim on.
Having the advantage of huge claims experience means that Aviva can draw upon past experience to ensure that more claims are paid in the future. Although they have not made wholesale changes to their plan, it is noticeable that the new conditions and changes are all targeted at high incidence conditions where claims will be paid. The removal of the child exclusion for Diabetes has hurt Aviva in the child CI area but the removal of this makes them a strong player in all areas once again.