Rest, the $51 billion superannuation fund, has awarded a group insurance mandate to TAL ending a 15-year relationship with AIA Australia.
The super fund said it is entering a memorandum of understanding with TAL to provide life insurance to Rest members from 1 December 2019.
Subject to final negotiations, Rest and TAL will complete work on a new insurance offering to commence on that date.
The agreement is a big win for the insurance giant as the tender is estimated to be worth around $750 million making it the biggest currently on the market. Rest currently insures approximately 1.5 million people.
“Our new insurance offering with TAL will be designed to provide simple, flexible cover, representing value for members’ money,” Rest chief executive, Vicki Doyle, said.
“Rest is committed to providing affordable and flexible insurance as part of superannuation to our members, and we believe TAL’s insurance offer represents real value for members.
The decision to move to TAL followed a comprehensive review of its insurance arrangements by Rest to ensure that it was offering members the best possible value.
“Rest is also continuing to invest in innovation and technology to improve the member experience, and we believe TAL is the right insurance partner to help us meet this strategic goal.
“In recent years, we have worked with AIA Australia to simplify our insurance policy wordings and rules to make them more understandable to members, and streamline the claims process to support faster claims decisions.
Doyle said the super fund will be working closely with TAL, AIA Australia and Rest’s administrator AAS to ensure a smooth transition of our insurance arrangements.
AIA chief executive Damien Mu said:”AIA has enjoyed a long and successful 15-year partnership with Rest, and we are very proud of the work delivered together in protecting millions of members during this time.”
“While we are disappointed to be concluding our partnership, we will continue to provide the highest possible level of service we can to all of Rest’s members while the insurance portfolio transitions to its new provider, as well as providing support to our claimants on an ongoing basis.
“As one of the nation’s largest group insurers, our focus remains on our partnerships and the impending acquisition of CommInsure, which will further strengthen our market position and competitive advantage in Australia.
“We have an ongoing agenda to transform life insurance in Australia and are making significant investments into our products, services and systems. We are very excited to introduce these new solutions to the market in the near future,” Mu said.