Engagement, education, & supporting super members.

Engagement and Education, the first step in balancing sustainability, suitability, and affordability for super fund members

Insurance in superannuation has come under significant scrutiny in recent years. Its value has been called into question, due in large part to insufficient member engagement and a lack of understanding of the purpose of insurance in superannuation.

This has resulted in a lack of appreciation of the value of insurance. Often, insurance is only valued when consumers make a claim, or are actively engaged with their cover following a significant life event. Due to this dynamic, and without proactive education and engagement, many consumers simply see insurance as just another fee that’s eating away at their super.

Default insurance in super is the right policy setting to provide a financial safety net to millions of working Australians. To ensure it 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.

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AIA Australia will prepare a series of discussion papers exploring different areas of insurance within super, to consider how the system can optimise to deliver on these pillars.  Read the first discussion paper here.

Balancing sustainability, suitability, and affordability

Discussing themes like sustainability and the implications of stapling, the first paper begins the conversation around how the industry can co-design solutions for members that promote engagement within the current regulatory landscape.

The paper reasons that 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.

Additionally, the regulatory reforms of the past few years have heightened the importance of an engaged membership. 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.

Incentivised wellbeing with AIA Vitality in super

A key point explored in the discussion paper is the importance of improving member education and engagement to deliver value and future sustainability. Of the many solutions proposed, one that has proven to show great promise in increasing member engagement is AIA Vitality in super.

AIA Vitality is a science backed health and wellbeing program. Based on behavioural science, members are empowered and incentivised to make small lifestyle changes with the aim of decreasing their risk of non-communicable disease.

Following the success of AIA Vitality in the retail life insurance and health insurance channels, AIA Australia has developed a solution for super funds that is available to their members who hold life insurance cover. This will engage members and encourage them to practise healthy living while making them aware of their super and life insurance and take positive steps towards financial wellbeing in their retirement through a $5 Active Benefit super contribution.

This model drives shared value: it delivers better health and value for customers, a better claims experience, engaged customers for partners, and a healthier society at large.

Click here to access AIA Australia’s discussion paper.