26 August 2019
Just over a month since the Australian Government implemented its Protecting Your Super (PYS) reform package, new research commissioned by MLC Life Insurance reveals that nearly half (48%) of Australian superfund members have heard of the reform.
These results come after a significant industry-wide campaign to raise awareness of the changes to life insurance inside super and prompt members to take action. Among Australian superfund members, 41% have taken some form of action including one third (30%) of Australians contacted their superfunds about the reform and 35% elected to keep their life cover.
With more than 70% of Australians holding life insurance inside super1, the research results demonstrate the value Australians place on life insurance in super.
Further to this, it also highlights that the industry-wide campaign and communications about the PYS reforms by superfunds to their members has had a strong impact on driving behaviour change, engagement and awareness among Australian superfund members.
Chief of Group and Retail Partners, MLC Life Insurance, Sean McCormack said while the life insurer participated and supported the industry sponsored public awareness campaign, there is still room to improve member engagement.
“We worked closely with our partners to ensure we supported them ahead of the PYS changes, including assistance with communications to their members. We’re always looking for ways to offer superfunds and their members more and support them during times of change,” said Mr McCormack.
The life insurer partnered with their superfund client, Vision Super, as part of their PYS campaign, supporting the fund during a two week outbound calling campaign to their members.
“We worked with Vision Super to come up with a tailored solution that met their needs. We provided temporary contractors to help them ensure their members were aware of the PYS changes and its impacts. This extra support saw a large number of Vision Super members opting in to keep their life insurance - highlighting the importance of engaging with members,’ said Mr McCormack.
While the research findings showed there’s been a strong response rate to the PYS reforms, as further regulatory changes take effect such as the Putting Members Interest First Bill, the life insurer says the changes may leave many Australians without adequate life cover.
“We strongly believe in the benefits of life insurance in super and think these benefits should be available as widely as possible. We’re concerned that further changes through the Putting Members Interest First Bill will unfortunately see some Australians uninsured or underinsured if a tragic event were to occur.
“As regulatory change reshapes the industry, life insurers and superfunds must redouble their efforts to lift member engagement. Our focus has therefore been on improving the way technology is used to allow members to make changes to their cover simply, and to do so in a more transparent way.”
The survey of 1,000 Australians, representative of the population, was carried out between 12 to 17 July 2019. The research explored Australians’ engagement and understanding of the Australian Government's PYS reform package changes that came into effect on 1 July 2019. The new laws, which aim to reduce the impact of life insurance and other fees on super account balances, include removing life insurance for inactive members, changes to fees and the transfer of inactive low-balance accounts to the Australian Tax Office.
The results of the research also show a majority (62%) of superfund members saw the PYS reform as a good initiative and 43% believe the PYS reforms have increased trust in the financial services industry.
Since becoming a member of the Nippon Life Insurance Group, MLC Life Insurance has delivered several technology enhancements, significantly investing in our people, processes and technology.
“We are delivering a massive, $600m investment in our technology transformation, including digital and data, infrastructure, and support services to better serve our funds and their members. LifeView, for example, provides us with a digital capability that gives trustees a genuine point of difference for fund members’ insurance needs,” said Mr McCormack.
MLC Life Insurance currently provides group insurance for MLC Super, Maritime Super, Energy Super, Vision Super and Qantas Super, amongst others.
1 Rice Warner 2016, Insurance through superannuation, viewed 20 August 2019, Rice Warner, https://www.ricewarner.com/insurance-through-superannuation/