To improve Sunsuper members’ access to cover and enable the big fund to insource more of its underwriting and claims functions, group insurer Suncorp has simplified its business structure and begun imparting its knowledge of how group risk works.
Group insurance has been a “rapidly changing animal” over the last twoto- three years, says Michael Back, executive manager – group risk at Suncorp. Not only have superannuation fund members – responding to public awareness campaigns about underinsurance – become more attuned with the inbuilt cover in their accounts, but super funds have taken an interest in delivering underwriting and claims management processes that are less frustrating for members and more time-efficient. This has stepped up the pressure on administrators and insurers to provide better services.
But the $7.9 billion HostPlus took a comparatively giant leap further to fully insource claims management functions. Now the $15 billion Sunsuper, which has about 1.2 million members, aims to take on a more active role in insurance underwriting and claims management processes. To do this, it’s learning some tricks of the trade from its longtime group life provider, Suncorp. Sunsuper is currently tendering its group insurance contract, and among other specifications, it is seeking a provider than can educate its administration staff to insource a substantial proportion of underwriting and claims management functions. Its incumbent provider has already granted it authorisation to underwrite and manage less complex, ‘cleanskin’ cases. Back acknowledges that insurance applications and claims can be frustrating for members if – as is often the case – they are forced to contact many people at the fund’s administrator and insurer, repeat the same information, and are asked to complete or re-write further paperwork. “I think super fund members should get better treatment than what they have received to date,” Back says.
The traditional business model used by many group insurers is too complex and creates too many “contact points” for members, he says. This is because they involve organisational silos – such as product, pricing, business development, underwriting and claims – which make it difficult to co-ordinate decision-making and track the progress of claims. “This creates multiple points of contact. To get a decision accepted across the board, the matter needs to be handled by various business units. “This has a negative impact on costs, and cycle times can blow out, and decision-making capacity is retarded.” These departments control different decisions in group risk, and it can be difficult to make them speak with each other, and “this creates a drop-out rate” among fund members, Back says.