Checklist - your way to contemporary group cover
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The intent of group cover has always been clear - to provide members with basic cost-effective insurance that protects them and their family against economic loss as a result of injury or illness.
However, what is becoming more evident is that speed of change means that, without a regular and robust review of the group product, it can fail to remain contemporary.
Previously, changes to the group segment were predominately driven by competitive market forces and trends from research rating houses. While these forces remain, today’s “new normal” is also about being more proactive in understanding the fund’s strategy, their target market and regularly ensuring the offer is fair, while providing choice and flexibility.
Much of this change is being driven by the transformation of the wealth management industry as a whole, evidenced by:
• Funds addressing profitability challenges by merging and funds that were traditionally focused on a single industry are growing into multi-employer funds
• Headwinds impacting the sustainability of insurance pricing, which is attributable to both structural and cyclical factors
• Australians as a whole are becoming more cognisant of health and wellbeing, including seeking medical diagnosis and treatment proactively so they can live a longer and healthier life.
Funds, employers and insurance partners know that a deeper level of analysis now needs to be applied to what is offered. With greater regularity, all these parties are having richer conversations about balancing value and sustainability.
As an example, the option of Income Protection cover is becoming a more meaningful benefit within the group offer as rehabilitation programs mature and drive a stronger, and more immediate, benefit by getting employees back to work.
For those funds who aren’t resourced up to review the technical aspects of policy terms and claims experiences, at CommInsure we run workshops and ensure a contemporary “checklist” keeps the offer fairer, overall.
In order to deliver the most contemporary offer to our group partners, we see clear benefit by bringing three perspectives to the table at the time of any review:
• A technical assessment, to benchmark suitability of the product and reasonableness of pricing
• A strategic discussion with the product issuer and trustee, to ensure it is relevant
• A full-circle review with claim managers, to include feedback from claimants to ensure the customer attains the right value from their insurance cover.
We conduct these reviews as part of a regular cycle and assess their current offer against a contemporary “checklist”. This ensures the true intent of the group offer is actually reflected by its policy wording and definitions as well as against a long-term view of sustainability.
Our recent review activity in this space is driving change for many of our partner offerings. The sustainability of the offer is being addressed by reviewing claims experiences. Employment tests are being adjusted to changing employment conditions, broader scope is being given to considering other occupations and there are more realistic and practical assessments for helping claimants stay in the workforce.
More contemporary trends and views are also being taken into account. As well as improving the policy language from a readability perspective and updating medical conditions to reflect medical advances and changes in terminology, the terminal illness certification period can be extended to 24 months to align with changes to the SIS conditions of release.
Other options being considered are expanded TPD definitions that reflect changing societal norms such as assessing someone who has been out of the workforce against domestic duties and not the occupation they were in 5 years before.
The activities of daily work test includes more objective assessments such as walking freely or manual dexterity to use a keyboard. And, income benefits are taking into consideration a longer time horizon to account for changing medical opinion that recommends those with a degenerative condition stay in the workforce on reduced hours for a period of time to maintain greater quality of life.
Some other changes we have offered include making sure pre-existing condition exclusions do not last indefinitely but, instead, give the insured person the chance to receive more comprehensive cover after a waiting period has been met.
Above all, these changes clearly show that group cover is not set-and-forget. And nor should it be.
We know all parties want to ensure this offer delivers what it is meant to do - basic cost-effective insurance. A regular review against a robust checklist is the most effective way to do this so we can unleash a common goal: the value of protection for all our members.