BT Financial Group has scrapped Base Cover, an opt-out automatic insurance product which would have meant higher levels of cover and premiums for most members of its corporate and personal super products, after a large number of customer complaints.
The deadline to opt out of Base Cover had been January 18 ahead of a planned introduction on April 1, but the project was cancelled last week. Prompted by customer feedback, BT conducted research which found that many of the 280,000 members of its various super products had either not read the original letter outlining Base Cover, or had not understood that they had to actively ‘opt-out’ of the automatic, non-underwritten cover. BT Financial Group CEO, Rob Coombe, said the lack of engagement many members have with their superannuation, and the correspondence from their super plans, meant some members could have been paying for insurance cover they were unaware of, did not understand or did not want. “We must strive to ensure that our customers are fully aware of and understand any offer being made to them and that they consciously accept any change to their insurance profile,” Coombe said. Base Cover had intended to differ from other group insurance products by calculating the sum insured on an age-based scale — cover was to start relatively low, increase between ages 29–44 (to a maximum default $250,000) when financial commitments typically rise, then fall in later years. BT said it would now attempt to replicate the offer on an ‘opt-in’ basis, but admitted it would need to overhaul the arrangements based on the different number and nature of claims expected under an ‘opt-in’ system. Coombe added that more needed to be done across the industry to increase customers’ understanding of insurance and in particular the benefits of accessing cover through superannuation. “We hope that this experience will highlight the insurance issue for our members and encourage those with no cover or limited cover to take action to redress any insurance gap”.
Future Fund chief investment officer Ben Samild said that FY24 has been a great year for alpha creation, thanks to strong returns in equities and, unusually, across multiple hedge fund strategies all at the same time. He reflected the past few years have been “a difficult time to be an asset owner and to generate positive returns for risk assets” but the Future Fund is tracking well of its long-term mandate.
Simon Hoyle and Darcy SongSeptember 4, 2024
