Insurance in superannuation has come under significant external scrutiny in recent years. Its value has been called into question by critics of the system, due in large part to insufficient effective member engagement and a lack of understanding of the purpose and role of insurance in superannuation. This has resulted in a lack of appreciation of the value of insurance.
To ensure default insurance in super continues to deliver significant benefits to members, their families, and society, superannuation trustees are faced with the challenge of balancing three equally important pillars: sustainability, suitability, and affordability.
In this discussion paper, the first in a series, we begin the conversation around how the industry can co-design solutions for members that promote engagement within the current regulatory landscape.
At AIA, we believe sustainability should go beyond just stable prices, it should also extend to ensuring a product’s features meet genuine needs and that the community is confident that the product offers enduring value and fairness. In essence, if community confidence is low, this is likely to impact the sustainability of the system in the long run.
With stapling coming into effect, default insurance will be turned on its head and the system will be largely driven by member choice – making member engagement and education more critical than ever before.
To read AIA’s discussion paper, click here.