AIA says about 40% of customers taking out policies are choosing to add Vitality, a programme that offers premium discounts and other incentives to people who are living healthier lifestyles.

Spokesman Craig Glover said the response was very positive and adviser feedback had been good.

But Naomi Ballantyne, managing director of Partners Life, said she was not planning anything similar.

She said the insurance products Partners dealt with were intended to be there to support people when they stopped being well. A discount that only applied when someone was well was an anathema to that, she said.

“We want to be able to offer an insurance product to all New Zealanders.”

Selecting out “the vast majority” would not be a sensible business decision. “I’d prefer it if we got prices down, down for everyone.”

Customers were already fully underwritten when policies were issued, she said.

She was not worried about the prospect of picking up clients who were not well enough to qualify for Vitality, “as long as we’re pricing for it”.

But Glover said the product was designed to be accessible.

"The AIA Vitality discount applies to any health loadings (eg high BMI loading), which helps to make cover more affordable for customers who initially present with health issues. As customers engage in the programme and improve their health, there is an opportunity for these loadings to be reviewed.

"Many customers can also achieve the Gold status required to retain their AIA Vitality discount without participating in physical activity simply by completing the range of health checks and screens.

"For those customers who are unable to achieve the Gold status, the discount does reduce over time but customers will never pay more for their cover than our standard market offering, which is already highly competitive."

John Harrison, director of Paragon Insurance, said he had offered Vitality to a handful of customers and they had signed up. “It’s getting people to have a look at their health and have a bit of fun around that.”

He said some people could find it confronting to get a Vitality age score that was significantly older than they were, or to be told their BMI was not what it should be.

AIA is rolling out its Vitality programme, which offers premium discounts up to 20% for those who achieve its highest ranking, through exercise, diet and medical checks.

Michael Naylor, a senior lecturer in the school of economics and finance at Massey University, said the programme meant the insurer was getting the pick of insurance clients.

“This enables Vitality to pick clients who self-select themselves as concerned about health, and therefore a lower risk, and therefore Vitality can make profit despite offering lower premiums.

“Companies who do not offer these clients the same, will lose their best clients and be left with the less health-conscious, higher-risk, clients. Therefore they will have to raise premiums, and will lose more at-the-margin clients. These policies are an increasing trend internationally.

“They work best when linked to a telematic device, like a Fitbit, so a client's promise to exercise can be enforced."