AIA Singapore yesterday announced an initiative to help customers better understand their insurance policies, improve their financial literacy in a continued bid to bridge the nation's protection gap.
AIA Singapore’s initiative is set against the backdrop of significant protection gaps in the country. There exists a 74% gap in critical illness protection and a 21% gap in mortality protection, according to the 2022 Protection Gap Study by the Life Insurance Association, Singapore
While young adults aged 20 to 24 and fresh graduates faced significant protection gaps, external research showed that they have an interest in purchasing insurance but lack the necessary knowledge to make informed decisions.
“Compared to more mature generations, younger consumers tend to be more active online. In fact, our study found that over half of them are likely to explore digital touchpoints to expand their knowledge about insurance,” AIA Singapore said.
A recent study commissioned by AIA Singapore found that over 2 in 5 customers were not familiar with the details of their insurance policies. The survey also found that the majority of customers were most likely to selectively read their policy documents.
Customers' top three reasons for skimming or not reading their policy documents are that the information is difficult to understand, lack of time for a more thorough read and ease of tapping into their insurance representatives for advice.
“Minimising jargon in our policy documents and simplifying them will enable everyone to better understand what their policies cover and don't cover, allowing them to identify their protection gaps.
“Enhancing financial literacy and holistic wellness can go a long way with clear communication, and we hope this initiative serves as an effective step in that direction”, said AIA Singapore chief marketing and proposition officer Irma Hadikusuma.
The company said that its initiative to narrow the protection gap will be implemented through a multi-phased approach, starting with its HealthShield Gold Max policy.