Wealth management firm Colonial First State has announced plans to cut insurance premiums, following the re-appointment of AIA as its insurer partner.

The Commonwealth Bank-owned subsidiary says the rate reduction will apply to its FirstChoice Employer Super, Essential Super, FirstChoice Personal and FirstChoice Wholesale Personal products.

Almost 220,000 customers will benefit from the average 18% reduction in premiums across all Colonial First State products, with about $40 million in savings expected annually starting from the first quarter of next year.

“We’re delighted to reappoint AIA as our provider of insurance following a highly competitive tender process,” CEO of CFS Superannuation Kelly Power said.

She says AIA demonstrated significant uplifts in proposed service, technology, underwriting and claims management capabilities when compared with the other proposals that were received during the tender.

“The reduction in insurance premium for almost 220,000 customers is another example of how CFS continues to share the benefits of our scale with customers,” Ms Power said.

“We will continue to review our products and services to ensure our customers receive the best possible benefits at the lowest possible price.”

AIA Australia CEO and MD Damien Mu says his team is pleased to have won the tender.

He says the insurer will over time introduce its digital capability to Colonial First State’s members, including education tools and well-being program, AIA Vitality.

“We want to help members to know more about their health and wellbeing... and understand how they can improve these important aspects of their lives,” Mr Mu said.