POWERED BY MOMENTUM MEDIA
Group risk services may be unsustainable
As the group risk sector begins to see increasing auto-acceptance levels (AAL), concerns have risen about how funds will meet members’ needs in the future.
Damien Mu, chief distribution and marketing officer at AIA, told delegates of the Conference of Major Superannuation Funds (CMSF) he was worried that it was an unsustainable model.
“My concern is: when is the tipping point? We can’t just keep adding things on there and hope for the best. There comes a time when we need to step back and look at how we are meeting members’ needs,” Mu said.
He said that members were currently getting the benefit of not needing to go through the underwriting process, but he warned the claims impacts for insurers would play out in the next few years.
“As an industry we need to be mindful of the potential impact that auto-acceptance will have,” he said.
Mu was not the only one concerned about the sustainability of AAL.
Robin Knight, head of group market and actuarial at OnePath, told delegates he was concerned about problems of uninsurable people taking advantage of AAL.
“The worry is that you will get people joining industry super funds just to get access to these high auto-acceptance levels,” Knight said.
“We could have many latent claims sitting there that are going to emerge and which will be paid for by the ordinary membership,” he said.
AUTHOR
Ashleigh McIntyre
Recommended for you
Volatile markets driven by shifting US tariff policy failed to rattle Australia’s superannuation system in April, with balanced options inching upward.
ASFA has urged greater transparency and fairness in the way superannuation levies are set and spent.
Labor’s re-election has reignited calls to strengthen Australia’s $4.2 trillion super system, with industry bodies urging swift reform amid economic and demographic shifts.
A major super fund has defended its use of private markets in a submission to ASIC, asserting that appropriate governance and information-sharing practices are present in both public and private markets.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
93.34 3 y p.a(%)
2
Global X GlobalX FANG+ ETF
36.96 3 y p.a(%)
3
GAM LSA Private Shares AU I
34.22 3 y p.a(%)
4
VanEck Video Gaming and eSports ETF (AU)
28.89 3 y p.a(%)
5
Plato Global Alpha A
28.83 3 y p.a(%)
