Sunsuper has issued tender documents to selected group insurers to provide cover for its 1.2 million members.
In the five years since the $15 billion industry fund had performed a “major review” of its insurance offering with incumbent provider Suncorp, the range of offerings in the market had “improved considerably” and the fund was keen to assess insurers’ new capabilities, Tony Lally, CEO of Sunsuper, said.
“There are a lot of detailed changes in the RFP [request for proposal] to make the insurance product more modern and attractive,” he said.
This included age-based premiums, so that members paid an appropriate premium to cover their liabilities. This would result in younger and elderly members, who generally have fewer liabilities, paying less than middle-aged members who usually have more assets and dependents.
Lally said that Sunsuper, which bought Citistreet’s Australian fund administration business in 2008, had already gained authorisation from Suncorp to perform basic underwriting and manage less complex “cleanskin” insurance claims, but wanted to take on marginally more complex tasks.
“We want to extend that with the new insurance offering we get in place,” Lally said, but made it clear the fund did not want to fully insource underwriting and claims management but be responsible for a “significant proportion” of it.
Further insourcing of insurance functions would not require Sunsuper to increase its administration headcount because it would bring an end to the duplication of tasks performed by the fund and Suncorp, Lally said.
The fund has appointed Rice Warner actuaries to run the tender, who will report to Sunsuper’s head of insurance Matt Lobdell. The fund aims to finalise the new offering by December.