AustralianSuper’s group insurance contract – worth roughly $150 million in annual premiums – has gone out to tender with four providers understood to be shortlisted.
The four insurers understood to have made the shortlist for the business are the incumbent CommInsure, and competitors MetLife, Tower and ING.
CommInsure has been a longtime insurance provider to AustralianSuper, having provided group insurance to its predecessor funds, winning contracts with the Superannuation Trust of Australia in 1995, and then the Australian Retirement Fund in 2002.
The $28 billion, 1.5 million-member industry fund confirmed that it was tendering its insurance contract and aimed to decide on an outsourced provider in September or October.
Noel Lacey, general manager of administration at the fund, and senior insurance manager Greg Staunton are running the tender, with IFS Insurance Broking at this stage providing assistance with data collection. It is understood that death, TPD and income protection insurance are all subject to the tender.
The industry is keenly awaiting the outcome of the tender, as it will be seen as a litmus test for whether funds’ long run of negotiating additional benefits for reasonably static premiums has come to an end. Any rise in premiums would be a sensitive issue for AustralianSuper, given it increased its base administration fee from $1 to $1.50 per week from January 1 this year.