Insurance shifts from pricing to partnerships

Group insurance has moved from a price focus to that of partnerships with the ultimate beneficiaries being superannuation members.

According to TAL general manager of group insurance, Jenny Oliver (pictured), the way insurers work with superannuation funds has evolved over the last 17 years in the group insurance space.

“It used to be largely driven by putting the best price on the table. It was a supplier relationship. Now it is one of partnership and a trusted one at that,” she said.

As the relationship has evolved so too have the priorities and Oliver adds that the real winners are superannuation members.

“The service experience they get from their insurers and superannuation funds has dramatically evolved over the last 10 years.”

According to Oliver, insurance wasn’t perceived as being a large part of a superannuation funds’ proposition.

“Now the sector recognises the value group insurance can play by providing a basic level of default life insurance cover to millions of members.  We have also seen the evolution of new pricing models between superannuation funds and insurers,” she said.

Premium stability

Indeed, Oliver’s involvement in leading the development of these new models was recognised at the Financial Services Council (FSC) Life Insurance Awards.  

She was named as winner of the 2018 Industry Leader Award, which honours an individual who has demonstrated an outstanding commitment to innovative thinking to transform the life insurance industry and meet the challenges of the next generation.

“In recent years, we moved beyond the “black box” model of pricing to develop a true partnership approach, bringing in decision-makers across TAL, our fund partners and their advisers. We not only offer transparency across the important numbers and calculations, but it also supports us incorporating the important insights that our fund partners have into the mix.

“This means we can work together with confidence to meet the best interests of fund members by providing cover levels that are appropriate, affordable and sustainable.”

According to Oliver, specifically, these changes led to a move away from traditional three-year rate guarantees for a number of TAL’s partners, in favour of more responsive pricing models with greater levels of assumption and capital efficiency.

“With some partners, we also developed sophisticated premium trigger and adjustment models that allow excess premiums to be returned to funds when they exceed claims and admin costs. As these must be applied for the benefit of members they generate better member outcomes by increasing premium stability, equity and value for money,” she added.

For the full interview, see the May edition of AB+F

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