The $28 billion AustralianSuper aims to radically speed up member insurance claims processes under its new contract with group risk provider Tower Australia. “We want 90 per cent of risk cases processed within five to 10 working days,” Greg Staunton, senior insurance manager at AustralianSuper, said. This would be achieved by more extensive use of online and tele-underwriting, instead of mail correspondence to and from members, and more efficient communications between Tower and Superpartners, AustralianSuper’s administrator.

Currently, the 50 per cent of TPD claims being lodged over the phone were usually processed much faster than traditional, mail-based claims, which often contained incomplete answers from members who did not fully understand questions in the forms. Tele-claims allowed the fund’s claims assessors to talk members through questionnaires and ensure that the forms were fully completed. It also enabled them to filter information immediately and pass relevant details on to the insurer. “The key is to get information through decision-makers’ hands.

As soon as information is received it needs to go to the decision-makers.” Last month, Tower emerged as the winner of the AustralianSuper group insurance tender, beating incumbent CommInsure to secure the $600 million contract – the largest so far in the history of the Australian financial services industry. The major improvements the fund sought through the tender were pricing, product design, and support and service initiatives. While the competing insurers offered prices within a “close range”, they distinguished themselves in their product and service delivery, Staunton said. Jim Minto, managing director of Tower Australia, was confident the insurer’s claims and service models gave it an edge over CommInsure and the third shortlisted candidate, MetLife.

“Ten years ago a mandate like this would have been won on price, but it’s not the case anymore,” Minto said. Providing cover for members within a respectable timeframe – “how we can get facts and interact more quickly between AustralianSuper, Superpartners and the member” – had become crucial. To achieve this, more efficient underwriting and claims application processes should be underpinned by advanced technology: “The world is moving to electronic servicing models.” Tower runs four teams to cater for its standalone corporate fund and other super fund clients, but the largest has been assigned to AustralianSuper, and it is still growing. Minto said this team would steadily accrue staff in preparation for the handover from CommInsure in April 2010, particularly since the default income protection built into the product will bring a new source of claims. The default income protection, which can provide up to 85 per cent of a claimant’s salary, lasts for two years.

The fund also boosted the automatic acceptance limit (AAL) prescribing the amount of cover each member can apply for to $1.5 million. The previous maximum AAL for a member aged 30 or less was three units of death and TPD cover, plus some income protection, amounting to $257,400. Now that same member could apply for as much as $1.5 million, depending on their salary, Staunton said. “What we’re gearing to is an application process where members tell us what they need under AALs, and it’s those that don’t advise us that receive the three units [default cover],” he said. “The critical mass of AustralianSuper brings the security where we can deliver higher AALs and be comfortable.” The fund’s large member base and their low level claims since the last contract with CommInsure was struck saw their premium slashed by $48 million over three years. During the tender MLC Insurance won three clients from CommInsure, Tower and MetLife, the most recent being the Sisters of Mercy Staff Superannuation Scheme from CommInsure.

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