Group Insurance Topical Issues Insight Sessions

Working in a corporate actuarial function often means it can be harder to stay up to date with current issues in the industry. The Institute insight sessions have been a great forum for me to catch up on hot topics in the industry. Group Insurance topical issues were featured recently. What an opportunity to learn about the challenges faced by the insurers and reinsurers as well as challenges in data all in one go!

Challenges faced by the insurers
Poor disability experience coupled with increased lawyers’ involvement in disability claim activities had been attributed to drive key activities such as increase in group insurance premium, review and redesign of disability offerings. At one point, some reinsurers had no appetite to write new disability business. All these point to a fundamental topic – sustainability.

Sustainability comes in a package
Sustainable insurance offerings cover more than just pricing. It also includes type of coverage, level of coverage and eligibility terms and conditions. Prior to 2014, TPD was often offered as default benefit, fixed benefit and premium design with education, training and experience (ETE) definition. In hindsight, the design may or may not be in the best interest of the funds’ members. The recent product designs are shifting towards a strong focus on early intervention, vocational rehabilitation and return to work outcome focus. Richard Land walked us through some market pioneering TPD new designs such as SunSuper TPD instalment benefits with a five year sunset clause and PSSap integrated TPD and income protection product.

TPD definition was also being looked at. “Unable ever” vs. “Unlikely ever” – what is the implication of this change for the member. It was a privilege to hear the legal perspectives from Claire Machin.

With tightening market capacity, QSuper became the first non-profit super fund to launch its own life insurance company, QInsure. Setting up a new life company is definitely not a day task. Greg Staunton shared the three year journey that QSuper had gone through to get to QInsure today. Some of the key challenges like managing various stakeholders’ expectations that he had shared definitely resonated with my very own experience working in corporate transformation program.

Challenges faced by the reinsurers
I have particularly enjoyed this segment of the session mostly due to Andrew’s great sense of humour. Andrew shared his view how the role played by the reinsurer has shifted from a price-taker to a trusted advisor. The group insurance market prior to year 2014 was highly commoditised. It had a perceived improving TPD experience and prices drove many key decisions. During the period, reinsurer was a price taker. Since the start of 2014, the cost of group insurance has been on the rise as the insurers and reinsurers rebased their prices to reflect the increasing claim cost. Since then, the market players place a greater value on sustainable terms and have a greater focus on operational efficiency. Reinsurer is often relied on as the pricing expertise; playing its role as a trusted advisor.

Challenges in group insurance data
For those who work with group insurance data will know how labourous it is to clean and analyse the data. Data is infrequent and of poor quality. It often has missing values and contains limited useful analytical factors. Daniel Stone showcased how ABS census data could potentially be used as backfill to increase the predictability of the dataset; offering new insights. I can foresee the future of data analytics and can’t wait to see what the Data Analytics Seminar in October has to offer!

Insights – Topical Issues in Group Insurance (Part 1)
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Insights – Topical Issues in Group Insurance (Part 2)
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