One in five members who contacted their super fund for an update on insurance claims still felt left in the dark afterwards, with long hold times, unfriendly tone and heightened emotional stress emerging as the main customer gripes during the process, according to CoreData research.

As delays in claims handling continue to plague the super industry and regulators pile on pressure for funds to improve service standards, Andrew Inwood, global chief executive of CoreData said funds need to urgently rebuild trust around group insurance. 

Presenting the research findings at the Investment Magazine Insurance in Super Summit, Inwood highlighted that super fund and insurance executives both received an unsatisfying score when it comes to consumer trust.

According to the research company’s own trust benchmark, consumers gave retail and profit-to-member super fund executives an average trust score of 5.8 and 6 out of 10 respectively, and a 5.2 for insurance executives, compared to financial planners who scored a 6.1.

“Insurance is really, really old in humans. It’s older than money… The problem is that it’s a trust good, and trust goods are completely abstract,” he told the summit in Sydney this week.

“People are – at the point of contacting the superannuation fund to talk about their insurances – incredibly vulnerable, and that’s really something which is worth understanding. They are generally in some form of psychic, physical or emotional pain.”

Not having their needs met or queries resolved quickly, and in a compassionate way,  can become distressing, he said. But on the flip side, members reported that if support staff from a fund adopt an empathetic tone, offer quick escalation or have clear answers for simple questions, it can significantly uplift their experience in the claims process.

Inwood acknowledged that insurance claims handling is a complex area and that, depending on the specifics of a case, the processing time and customer satisfaction rate can vary greatly.

Across all claim interactions, insurance and death benefits interactions perform well with an average customer score of 7.6 out of 10. Early release claims, however, showed signs of struggle with an average satisfaction score of 6.8 out of 10.

The majority (92 per cent) of insurance and benefit claims are completed within three months, with eight per cent taking between three months and a year to complete.

The channel through which customers contacted their super funds also mattered. Phone support was the lowest scored (6.8 out of 10) with only 26 per cent of members who used the method rating it positively. Of those members who called their super funds, 13 per cent called once or multiple times without being connected; and of those members, one in four never received a call back.

A preference for digital solutions was also obvious. Among first channels used for interaction with their super funds, 36 per cent of members selected browsing the website for information, 26 per cent selected browsing online member accounts, 14 per cent of members used online chat, and 9 per cent inquired via website form.

“Digital self-service is absolutely preferred. They can do it themselves if they can do it online. If we can build the systems which allow people to transact themselves and move through it, then satisfaction is going to go up. Trust is going to go up,” Inwood said.

“While it relies on humans and processes which people don’t necessarily understand particularly well, then it appears to be relatively chaotic.”

Social licence is a fundamental part of super funds’ business model and Inwood warned that every time an explicit or implicit social promise is broken, cracks start to emerge in the model.

“It’s part of who we are as humans, as we’re looking for our tribe and our person to trust in the process. And if you build up a trust bank [and break a promise], then that can start to wobble around a bit. But if there is no trust bank, then that outcome is necessarily a bad thing,” he said.

“This [group insurance] is a public good… This will change an economy for the better, and it is fundamentally human and really important.

“Addressing the scale, making it digital, offering support – which is what people want to understand. And finally, banking that trust piece [in superannuation].”