The rate of increase in superannuation complaints will be shown to have slowed when the Australian Financial Complaints Authority (AFCA) reports statistics for the 2023-34 financial year, the Investment Magazine Insurance in Super Summit has heard.
AFCA lead superannuation ombudsman Heather Gray told the summit in Sydney on Tuesday that complaints have increased by less than expected.
“We were predicting a more significant uplift for the financial year just finished than has actually occurred,” Gray said.
“It looks like we will be reporting a 3 per cent increase in super complaints for the financial year just finished, as opposed to the previous financial year. So we are starting to see that level of complaint slowing down, which is absolutely fantastic.”
Gray said delays in claims handling remain the number one cause of complaints, and most of those complaints can be traced back to the root causes of poor communication and unmet member expectations.
She said if members knew what to expect from their insurance and if communication was clear and timely, “that’s how a lot of these things can be dealt with”.
“If people know what to expect, they have their expectations managed and they get a really clear understanding every step of the way, then things would be much better,” Gray said.
“About one in four complaints that we receive is actually about delay in claim handling. But…people are far more likely to come to AFCA to complain that there’s been a delay, and they haven’t yet had a decision, than they are to come to us and complain that their claim for an insured benefit was denied, which is just extraordinary. So nearly 1700 complaints just about delay, and then denial of claims 367 complaints. I think that tells us a lot – that’s where the pain points are.”
Benefits of advocacy
Future Group product and operations executive director Meagan Birch said the persistence of complaints about delays in managing claims makes it clear that, in many cases, members could benefit from an advocate within their fund to guide them through the process. Birch said funds need to get in front of this issue, so a member doesn’t feel compelled to turn to a plaintiff lawyer for help instead.
“If we take the view – and I am generalising here – that people that are suffering from mental health conditions are not always in the best position to make an informed decision at a point in time, they need an advocate to help them,” Birch said.
“They are vulnerable. But I would also say, too, if we take mental health out of it and we look at other claim types – again, I’m going to generalise here – I could almost guarantee that a TPD claim has a secondary issue around mental health. Nobody is going into a TPD claim ecstatic.
“So, assume every claim coming through is a vulnerable person that needs help or needs an advocate, and then we’ll probably see a lot less of those lawyers becoming part of the process because what [the member was] looking for was someone to fight on their behalf and they weren’t capable of doing it.”
Member advocacy could begin even before the member formally lodges a claim, the summit heard. Providing assistance to members to prepare to make a claim could smooth the process and help set realistic client expectations.
MetLife Australia head of service and operations, Olivia Sarah-Le Lacheur, said a common thread in member complaints is that they cannot differentiate between the identities and responsibilities of the parties in the process.
Members “can’t tell the difference between the fund, the insurer, and any administrator”, she said.
“It’s a complete experience for them and therefore, operating in partnership gives us the best opportunity to wrap our arms around the claimant,” Le Lacheur said.
“The question around identifying vulnerability is a really good one, because I don’t think it’s any one party’s job, I think it’s all the parties collectively.”
Good communication at the right time
Sarah-Le Lacheur said the key to handling a claim efficiently is “good communication at the right time”, and also creating systems and processes so claimants are treated as individuals rather than blind adherence to service level agreement (SLA) timeframes.
“If we think about the mental health background, what we’ve learned in our businesses [is] when you can set a time, a scheduled time, stick to the time and have the same person talking to the claimant, that sets the scene for a good-quality conversation, but you also need to allow a lot of time,” she said,
“We all know our admin agreements, or our service level agreements, were really strict on how fast things move. [In the case of a vulnerable person] it’s the perfect reason to not hit an SLA, because this might be a 40- or 50- or 60-minute phone call, not a two-minute phone call, or one email.”
AustralianSuper head of insurance product Richard Land said that while complaints continue to arise from how funds, insurers and administrators work together to handle claims, improvements have been made in the 12 months since Minister for Financial Services Stephen Jones told the Group Insurance Dialogue – the predecessor event to IISS – that they must do better.
“There was a bit of a precursor to our session today with Stephen Jones giving us the rev last year and saying that we hadn’t actually achieved success yet,” Land said.
“What I can say is for one fund, being AustralianSuper, and my experience is we have taken them absolutely seriously.
“And it’s been taken so seriously, those claims delays and the claims timeliness, [that] it’s been right at executive and board level. Just to meet those expectations, we have taken some pretty concrete steps and taken it seriously.”
Land said AustralianSuper has worked with its insurer, TAL, to streamline the claims process and to ensure the right people are dealing with the right aspect of claims – for example, by shifting responsibility for assessing a claim at the outset from the fund’s administrator under delegation to the insurer.
Getting timeframes right
Land said the fund has also worked on “just getting the actual timeframes right in the Life Insurance Code of Practice”.
“It shows that people just want their claim play paid in a timely manner, and just doing that transition led to our Life Insurance Code of Practice metrics, which we measure on a monthly basis, getting to all-green by the end of February, at a 98 per cent level.
“So that’s just factual stuff. It’s not empathy – well there’s empathy as well – but it’s actually just getting house in order and that sort of thing.
“It wasn’t simple. It was a significant project. And we certainly had both good logistics, but also some just real hard yards, particularly by the insurer’s claims team, and particularly by their claims team leader. So that was fantastic.”
Land said AustralianSuper has also revamped how it handles death claims, “which may or may not have an insured component but which the trustee has a responsibility under the SIS regulations to distribute properly to the beneficiaries and the financial dependents, or also the personal legal representation” of the member.
“That’s much more tricky,” Land said.
“You have to get the balance right of getting all the information about who might be the dependents, who might be the beneficiaries, and juggle that against making a timely decision.”
