Wendy Tse, Chief of Staff and External Affairs at MetLife, shares key insights into the challenges and opportunities ahead for group insurance following her presentation at the ASFA Virtual Conference in February 2021.
What will be the future of group insurance?
We see the future evolving around changing member expectations that drive member engagement. Specifically:
- Stronger data is fundamental to creating deeper insights and meaningful interactions with members. It offers the ability to use super and non-super assets, and different dimensions of data (for example, property, salary, typical/susceptible illnesses, hereditary lines) to educate and empower members to assess their adequacy of insurance cover;
- Further development of segmentation models ensures the right information is delivered at the appropriate stage in life. This will be supported by intuitive tools that help members make informed decisions, all of which will become more important in the light of the member outcomes test, extension of work age, emergence of fluid workforces, stapling of accounts, and the anticipated YourSuper comparator;
- A reliance on machine learning and AI will automate labour-intensive tasks and repeatable processes, and replace paper-based functions in claims and underwriting to accelerate the process. This is not to be mistaken with removing the human touch because life insurance is a people business.
Above all, the future is a seamless integration of all parties associated with insurance to share real-time data and support the need for a single source of truth.
How can insurers address member engagement?
The pandemic has highlighted the importance of insurance, especially for those who wouldn’t otherwise have held insurance outside of super. Many only realise the value of insurance when it’s needed, so it’s important for funds and insurers to engage with members to help them understand the benefits they receive. Our research shows a clear link between a member’s engagement with insurance and their relationship with their super fund.
Those who have modified or increased their insurance1 are more likely to:
- Engage with and check their super more often;
- Have greater awareness of how much super and insurance cover they have;
- Perceive their super fund to rate better than others on attributes such as investment returns, fees, customer service and communications;
- Have greater loyalty to their super fund and recommend it;
- Speak with their children or parents about super and insurance.
This paves an opportunity for insurers to work with funds to improve member communications and highlight when members should be thinking about the protection they have.
How important are streamlined digital interactions?
The pandemic has fundamentally changed consumer expectations and behaviours. Digital, contactless interactions are becoming the new norm. Members expect seamless interactions with super funds and absolute transparency during the claim process. For example, a member should be able to log in and see exactly where their claim is at, upload and digitally sign documents, and get access to support.
How else can insurers improve their relationships with members?
Group insurance is about supporting members’ physical, mental, social and financial wellbeing. Our research shows that through our return-to-work programs, members who play a greater role in society feel more valued compared with those who only receive long-term claim payments.
Our award-winning 360Health is based on this premise. It equips members with information around prevention, early detection, return to health, ongoing care and financial support, rather than providing members with monetary incentives towards activities.
It’s about identifying risk factors and providing targeted actions to support overall health and lifestyle goals. This is in conjunction with connecting members with community and support groups. We’re seeing improvements in member outcomes. For example, we’re seeing referrals to external occupational rehabilitation providers helped:
- 35 per cent of claimants return to work;
- 55 per cent achieve an upgrade in the work certificate from their GP;
- 70 per cent achieve improvement in functional/health status.
ASIC wants higher payout ratios while APRA wants insurers to be sustainably profitable. What does this mean for insurers?
The focus should be on paying all genuine claims to drive the right outcomes for members, a robust claims philosophy puts the member at the heart of all decisions.
At MetLife, we have the privilege of protecting close to two million lives and paid over $504 million in claims in 2019. More often than not, we only hear when a member hasn’t been paid a claim, however there has been little attention to the high levels of claims-acceptance rates upheld by the industry. We're often well above the industry average for claims paid:
- Death – 99.3 per cent acceptance vs industry 98.1 per cent;
- TPD – 93.6 per cent acceptance vs industry 90.8 per cent;
- IP – 96 per cent acceptance vs industry 95.7 per cent.
(Source: ASIC Moneysmart website)
Pricing shouldn’t be a key determinant in appointing a successful provider. There needs to be a mutual investment in partnering to build sustainable product solutions that cater for the changing member demographics and, in turn, address member outcomes. This could include sharing data around actual claims payments, changes in the timing of claims payments versus anticipated, assumptions underpinning the membership base, and economic data to understand underlying premiums and terms and conditions.
How should funds and their insurers address mental health concerns?
MetLife is a strong advocate for mental health reform, particularly where insurers can play an active role in supporting customers. We would like to see more flexibility in the regulatory settings to allow life insurers to fund health services, which would enable customers to return to health faster.
We know mental health is the third most common cause of disability income claims. We also know the life insurance sector is the largest non-government supporter of people suffering mental health issues, paying about $800 million annually in claims to people experiencing mental health conditions.
While life insurers can offer only limited mental health services, MetLife's mental health initiatives include:
- Extensive staff training to support our customers' mental health conditions, including rolling out SuperFriend’s Person-Centred Communication approach;
- Advocating with the industry, including the Financial Services Council, to improve access to mental health services across a range of settings, including through insurance providers;
- Partnering with the Mental Health Professionals Network;
- Providing mental health preventative and recovery resources and tools through our 360Health program to support customers;
- Ensuring our people are given what they need to be mentally healthy.
What can funds do in the near term to improve members' perceptions of value from insurance in super?
Funds can start by reviewing all marketing and communication collateral and test the effectiveness of the value of insurance across several membership segments to address perceptions held by their members.
Insurers tend to be judged on how easily they handle claims, so it's important they understand what members experience at this time. Funds can work with their insurance partner to improve the insurance journey at every step by:
- Making sure it's easy to understand and in plain English;
- Making sure forms are easily accessible, auto populated, and can be uploaded and digitally signed;
- Ensuring members are well informed on next steps, timeframes, anticipated updates and any outstanding information;
- Providing direct contact details for the claims manager and encouraging members to maintain regular contact;
- Providing alternative contact methods for the member to choose their preferred way of communication.
These measures will create greater understanding and trust that insurance in super provides financial protection. Risks can be pooled in a way that keeps costs down and cover will be available for members who may not otherwise be able to afford insurance.
It's important for members to understand that expensive insurance does not necessarily equate to being the worst value. Conversely, the cheapest insurance is not always the best value. ASIC is clear on this: the value a member receives over time matters more than the value at a single point in time.
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