The Australian group insurance market is world’s best practice, but there are still a number of improvements that can be made, say the chief executives of the two largest group insurers in the country.
At a recent industry event, TAL Australia chief executive Brett Clark and AIA Australia chief executive Damien Mu both expressed their pride in the benefits their industry provides to millions of Australia and spoke of the work under way to further raise standards across the industry.
In particular, Clark said, insurers need to think about how to design for the group and the individual.
“When we ask these questions, we quickly move away from talking about product,” he told the 2017 Group Insurance Summit, in Sydney on August 29. “We need to think retail not wholesale. Members need to be at the centre and the start of everything we do.”
Clark said group life insurers need to think about how to equip super fund members with the right information before they make a decision.
“This is about good information not reams of information,” he said. “This is the primary responsibility of insurers and their superannuation partners. In this way, we don’t just provide a product.”
Clark said all parts of the superannuation industry need to be confident and resolute in showing support for group insurance.
“The system we have today is world’s best practice and of great value to millions of people,” he said. “But we also have a huge responsibility as insurers. Group insurance in super is unlike any insurance market in the world. The breadth and simplicity in some respects, and the complexity in others, are unique.”
He said the fact the Australian market is debating adequacy of insurance, not access to it, is a remarkable achievement for the market and the industry and a direct result of the group insurance model.
“But this also means the responsibilities and obligations of insurers are more profound and significant than in any other market. The industry provides enormous value to members, but also to insurers, so the expectations and standards should be of the highest order. We must think and act like trustees.”
Earlier in the summit, AIA Australia’s Mu said that “while we continue to put the microscope on ourselves…it’s really important to see some of the progress we’ve made”.
“We’ve come together not only in this forum, but in things like the ISWG [Insurance in Superannuation Working Group]; associations, funds and insurers all coming to the table to discuss the important issues of where we can improve benefits to members and all Australians,” he said.
If not for super, only about 18 per cent to 20 per cent of Australians would have cover, he said, and noted that about 80 cents out of every dollar taken in premiums is paid out as benefits, making the Australian life insurance industry one of the most efficient in the world.
“That doesn’t mean we should exploit that situation,” Mu said. “That means we should be looking at how we use this efficient vehicle to deliver more value to Australians.”
The 2017 Conexus Financial Group Insurance Summit was produced with thanks to support from platinum sponsors AIA Australia and TAL Australia, and silver sponsor Swiss Re.