According to a new survey from one of Australia’s leading group insurers, AIA Australia, sustainability of premiums is still the biggest issue facing group insurance.
Superannuation and insurance professionals at the recent Group Insurance Summit were asked for their views on current issues in the life insurance industry. Almost 50% of the 105 respondents noted sustainability of premiums as the biggest issue, while 23% believed increasing claims were also a problem.
Additionally, respondents said the most important thing the industry should be doing to address the sustainability challenges was to either change policy designs (40%) or intervene earlier to reduce the duration of claims (34%).
Commenting on the results, AIA Australia Chief Executive Officer Damien Mu said:
“Group insurance plays a critical and efficient role in protecting millions of Australians through superannuation. We have an important role to play in making a difference in people’s lives when they need it most and we shouldn’t forget that. While premiums have gone up in an initial tactical response to address some of the claims experience, pleasingly good progress has also been made initially in the market through improved product definitions, rehabilitation and return to work programs and benefit design. In addition, more is being done as we see insurers and funds working together to develop the best offering for their membership needs and balancing the cost inside super.
“We need to think more broadly about the ways we manage claims, so improving the experience with better communication, in addition to improved rehabilitation programs, training and education for members and employers needs to be a key capability for group insurers,” he said.
Industry respondents believed life insurers could add more value to their members via more efficient claims processes (29%) and more creativity in product design (29%). Additionally, premium discounts for healthy members (36%) and more tailored policies (32%) were features industry respondents noted that they would like to see more of.
“Clearly our main focus is, as it should be, is on delivering relevant and valuable insurance benefits to the insured member; in the case of the claims process we are making great strides to improve the member’s claims experience and a lot more must be done. We also need to look at how we continue and accelerate the momentum around innovation and change to group insurance benefit design as the industry evolves,” Mr Mu added.
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Contact: Rebecca Piercy
02 8248 3740
About AIA Australia
AIA Australia Limited is an independent life insurance specialist with over 40 years’ experience building successful partnerships. One of the country’s leading life insurers, AIA Australia offers a range of products that protect the financial health and welfare of more than three million Australians.
AIA Australia is the one of the country’s largest group life insurers by market share and works closely with major financial institutions and corporate partners. In addition, AIA Australia offers retail insurance products through financial advisers and a valued network of affinity partners.
By having a partnership philosophy at the core of its business, AIA Australia is focused on building sustainable relationships that add true value to its business partners. Numerous industry awards, including, AFR’s Smart Investor Award for Best Term & TPD Product (2014 and 2015), ANZIIF’s Life Company of the Year (2015, 2013, 2012), stand as testament to the success of our commitment to productive partnerships.
AIA Australia is part of the AIA Group, a market leader in life insurance across the Asia Pacific region for over 90 years.