AIA Australia has struck a five-year distribution deal to provide life insurance to Bendigo Bank customers.

A new brand, Bendigo SmartCover, has been created to encourage bank clients to buy life products.

Bendigo Wealth Executive John Billington says working with a specialist life insurer is an important step towards providing comprehensive financial advice.

“Research showed underinsurance was an issue for our customers and we needed to do more to encourage them to take out cover, and therefore protect their future financial health.

“By building a solution that removes some of the barriers to taking out life cover we believe this is the ideal starting point.”

In 2012 research showed 56% of Bendigo customers had no life insurance, while 69% lacked income protection cover.

AIA GM Life Insurance Damien Mu says the deal will help the insurer reach more than 1.5 million people through bank branches and community outlets.

“Bendigo Bank will determine how best these [products] are promoted throughout its branch network,” Mr Mu told insuranceNEWS.com.au.

“As this is a staggered launch, it won’t be exactly the same at each branch across all regions initially, and it will be carried out in response to customer need.”

Mr Mu says bank tellers will be briefed on products, but customers will be referred to fully trained life insurance consultants.

AIA and Bendigo have also set up a call centre to sell products – operating under the insurer’s Australian financial services licence – and a website for customers to get quotes and buy products.

“AIA will provide general product training, but bank staff will not be selling the product,” Mr Mu said.

“We will assist Bendigo staff to help them identify customers for whom the insurance offer would be appropriate, then refer that customer through to the phone-based life insurance consultants or to the website for self-service.”