At the recent AIST Super Insurance Symposium, the increased scrutiny on the provision of insurance-in-super was well and truly highlighted, along with the impacts to insurance-in-super products and services that stem from the vast change occurring within the industry.

Since the idea was born in 1923 to have a comprehensive national insurance scheme for retirement, sickness or disability, the inclusion of insurance-in-super into the national retirement income system has come a very long way. Today, the super industry remains the leading supplier of death and total and permanent disability insurance in Australia and trustees are under more pressure than ever to offer affordable default insurance cover that is in their members’ best interests.

So what is affordable insurance?

ASIC describes it as “insurance that caters to different cohorts of members and is priced sustainably” and in December 2020, the regulator released Report 675 Default insurance in superannuation: Member value for money (which explored the metrics that trustees can use to analyse the value of money provided by their default insurance arrangements).

Underpinning the ability for trustees to better understand what is ‘affordable’ for different cohorts of members, as well as how to manage and maintain their insurance offering, is a complex web of data management.

The data challenges

  • implementing a ‘single source of truth’ and appropriate data governance;
  • updating systems and technology that is fit for purpose now and into the future;
  • updating and embedding architecture to collect, triage and use data in a timely manner;
  • finding (and keeping) people with the data skills and capability required; and
  • ensuring processes have the right balance of people and technology for the benefit of both company culture and member experience.

Where do funds get started?

  • data strategy needs to be supported at the executive level to ensure objectives and outcomes are communicated to all;
  • establishing a data strategy, and attaining data maturity, involves all facets of the organisation and must be mapped to the People, Process and Technology Frameworks;
  • establishing data maturity should be seen as a journey where you first crawl before you can walk, and then run. Getting the foundations right in terms of operating model, architecture, data domains and reporting metrics is critical in order to automate data extraction, make it near-real time and make it easy for all stakeholders to consume; and
  • technology now allows us access to huge amounts of data across systems, but to leverage that data requires a structured an incremental approach.

Better outcomes for members

Many Australians are still unaware they hold insurance through their super fund. So how do trustees ensure this huge amount of effort and investment pays off with increased member engagement?  How do funds know what the ‘right data’ is to obtain members attention, gain their trust and guarantee their emotional buy in? How do they source the ‘right people’ who know how to orchestrate the data for use in the ‘right channels’ at the ‘right time’? Funds should consider mapping the member journey then focus on high value use cases and targeting specific problems in order to unlock the answers to these questions.

For super funds to stay ahead of the game, it simply boils down to how best they, and their administrators, manage data. If the Government announces a review into insurance in superannuation – as recommended by the Productivity Commission – it might lead to the biggest shake-up of group risk insurance in decades. The coming APRA Insurance in Super Heatmap will also cause waves. Speakers at the symposium emphasised that how funds go about designing products and managing claims will be critical to creating optimal insurance outcomes for members. It will require further innovation and flexibility on the part of super funds and their providers.

IQ is well equipped to support clients in building a customised insurance roadmap to ensure they know their members, design suitable and appropriate insurance products, monitor insurance outcomes and empower members to make appropriate decisions. It isn’t easy, but we’re here to help!

By Chris Randle, Principal Consultant