The timing is right for industry funds to strongly engage with members and personalise their insurance cover through the use of artificial intelligence (AI), says Swiss Re Head of Solutions for Australia and New Zealand Daniel Levy.

While Protect Your Super (PYS) and Putting Members Interests First (PMIF) laws now ensure value for super fund members on their insurance, industry funds were also well placed to use AI and machine learning to get the best value for members.

This comes after recent warnings from consumer advocates that legislation was prompting  higher premiums for death and disability cover.

“One of the key things here with AI is there’s a real opportunity for industry funds to engage really strongly with members and enable members to personalise their insurance – to select their own insurance and in that way, the members will truly get the best value out of their insurance premiums,’’ Levy says.

Speaking ahead of his ‘Artificial Intelligence: Big Data and Scale’ session at Investment Magazine’s Group Insurance Summit on Thursday, Levy says members have good trust in their industry funds. You can reserve your last minute digital pass here.

The recent Productivity Commission inquiry into Superannuation shows only 25 per cent of members engage with insurance in super despite super industry advocate ASFA data showing 89 per cent of members listen to their funds, at least some of the time.

“When you’ve got industry funds of nearly two million members, many other audiences that companies would have where they have 89 per cent of their messaging out there gets listened to is quite amazing. They’re in a really good position,’’ Levy says.

“We did some work with a client this year and established that 91 per cent of Australians, if they’re thinking of buying insurance, would actually buy online if they had some help.”

He says Apple’s phone assistant Siri, Google products and use of big data by Australian banks were providing better user experiences through AI and machine learning.

“There’s real opportunity for super funds to take advantage of what AI enables in terms of making things personalised and understanding the triggers for members to find the offers that are relevant,’’ he says.

AI used with other tools like behavioural economics would also make people feel confident about their choices.

“Half of the challenge here is about members feeling confident on how they interact with these complex financial matters,” Levy says.

Generally the life insurance industry does not use big data as much as other industries such as collection of data from wearables, e-wallets and social media, he says.

“We absolutely need informed consent in terms of use of data. If consumers were happy to trust us …  we can get great insight into lifestyle factors. The more data we’ve got the more helpful we can be and informed consent is critical to that,’’ Levy says.

AI enables super fund trustees to understand what customers need and what triggers will prompt them to engage and how funds can empower members to act on insurance.

“We’ve got to be mindful … the more we personalise it and understand the individual member, the more we tailor what is important and meaningful to them, the more we stray into offering personal advice. We have to be really careful about that. And at what point do we move from being helpful to intrusive,’’ Levy says.

While Australia has strong consumer protections on data usage, this brought pros and cons – consumers had greater confidence that their data was used responsibly but better user experiences were more difficult to deliver.

“The most exciting thing from an analytics point of view which is where we get into machine learning from ongoing experience,’’ Levy says.

“Here’s where our members have interactions with us … from those interactions we learn what will yield the outcome that we want and in future the AI will then know how to optimise the journey and the interactions with future customers.’’

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