At the time members only had one unit of insurance cover, at default. An individual had to elect at the time to increase. And so we looked at what the attributes were of members who had more than one unit and then modelled that within our database and came up with those attributes. And then we sent a targeted mail to that group, and then had a control group. And we found that we got a 9% response rate from members to that offer, compared to the control group of 3%. Actually 3% was still pretty good. But we got a 9% response rate.

Michael Bailey: What were the attributes of those who took it up?

David Atkin: It was things like, had they taken out investment choice? Have they made a roll in, in the last 12 months? Had they made an additional contribution? So signs of engagement with the fund. And an account balance above $10,000. I think they were the four key attributes. Now that was still very unsophisticated in lots of ways.

And if I just use that as an illustration to say that if funds spend some time and effort doing that data mining exercise – and I think we need to do some more experimentation – then we’ll have some success at trying to get to members at the right point in their lives, to start to think, okay I need to start to think about this. And then we need to make sure that we make it easy for them to then engage with us and then take out insurance if that’s what they want.

Geoff Brooks: I think strategically you can’t overlook the fact that insurance is one of the few things that will keep a member in a fund, that no one can offer. I mean as a retention tool it’s probably one of the most under utilised things we have. The people in Equipsuper are very interesting because they’re very mobile. Research showed that one of the primary reasons for people who’d left the fund was the fact that they hadn’t been given adequate notice of the fact that they would lose their insurance cover if they didn’t exercise their continuation option for a reasonable amount of time.

Mark Griffiths: The work we did on the under insurance problem really focused on the families with the children, so the statistics that were produced from that were related to families with children. The real gap in that study I think is with the assumption that only people with children really need cover. When I started to think about the problem, I started to think well if you were 20 and you become disabled permanently, you need to replace your income or rely on other people’s generosity or the social security system, or if you had an accident some other form of compensation.

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