Super funds fail to turn the page on claims handling 

Every time the superannuation sector attempts to flip the script on insurance and death benefit claims handling, it somehow keeps getting dragged back into the spotlight for all the wrong reasons.

For years, the sector’s leaders and lobbyists have sought to reframe the conversation and assure regulators, consumer groups and the general public that it is listening and making improvements.

After a long period of silence during the worst of the crisis surrounding the administration and claims handling failures at Cbus, the construction industry fund’s chief executive, Kristian Fok, used the Investment Magazine Insurance in Super Summit last year to issue a mea culpa.

“What we experienced, and some others in the industry, was absolutely horrific in terms of the experience that our members received at a time when they absolutely needed us,” Fok told the summit, which will be held again at the Intercontinental Double Bay in Sydney on July 21.

Saying sorry can be powerful. And since then, the prevailing view in the industry and in Canberra has been that the public relations disaster was starting to subside, particularly as the collapse of Shield and First Guardian moved the spotlight off big super and onto other parts of the financial system like wealth platforms, managed investment schemes and research houses.

But the Australian Securities and Investments Commission seems not to have gotten the memo. In a statement accompanying the release of ASIC Report 831 last week, Commissioner Simone Constant said that while there has been some improvement in insurance and death claim benefit handlings across the board, including a 53 per cent reduction in internal complaints about death benefit delays from early 2024 to late 2025, “stragglers” continue to cause alarm.

“With claims volumes increasing by 10 per cent in the 12 months to October 2025 and with that growth expected to continue in the context of Australia’s ageing population, it’s clear that more work needs to be done if all trustees are to meet member expectations,” she said. 

“We’re particularly concerned that some trustees have not actioned basic process improvements and continue exposing grieving beneficiaries to harm at times of heightened emotional and financial distress.”

“There is no excuse for delays in delivering better outcomes for death benefit claimants. Super trustees have now had over two years to respond to concerns that we began raising back in 2024.” 

This is not a verdict we can simply ignore.

In some markets it might be appropriate to paint these laggards as being a fringe-dwelling minority out of step with the professional mainstream. But in a unique and contentious system of compulsory participation, wrongdoing by any players can undermine confidence in the system as a whole.

And clearly the Commissioner is not yet confident that claims handling deficiencies have been satisfactorily resolved. 
Some funds have done the work while others have not, which also introduces an element of intra-system unfairness. When you have a cohort of stragglers pulling down the aggregate, a 53 per cent improvement in complaints becomes a headline that obscures as much as it reveals.

Pleasingly, this is no longer the status quo. And, increasingly, technology may provide some of the solution, even for the so-called “stragglers”. AI is beginning to move from theoretical application to operational reality in claims processing. 

It may prove adept at accelerating document verification, flagging incomplete nominations and other red flags, routing simple claims more efficiently and maintaining more consistent communication with claimants during what are, for many families, the most stressful weeks of their lives. 

None of that replaces human judgement on complex cases. But the industry’s persistent problem with timeliness – particularly on what ASIC describes as low-value, low-risk claims – is precisely where AI-assisted processing should be able to add value.

The mandatory member services standards proposed by the federal government are coming. The enforcement posture from ASIC is unambiguous. 

Only meaningful change by every fund in the whole super system, not just a handful of PR-savvy leaders, will result in the page finally being turned. 

The Investment Magazine Insurance in Super Summit will be held at the InterContinental Double Bay in Sydney on July 21. Limited tickets are available to executives and employees of APRA-regulated super funds. For more information visit https://www.investmentmagazine.com.au/category/events/insurance-in-super-summit/2026-insurance-in-super-summit/#agenda

Aleks Vickovich is acting co-chief executive of Conexus Financial, publisher of Investment Magazine. Conexus founder and managing director Colin Tate AM is on long service leave.