Consumer Engagement Report – ASIC’s deep dive into super fund member satisfaction
- Newsletter Article
- Published 15.12.2020
At the start of the COVID-19 lockdown, ASIC conducted a ‘deep dive’ into the experience of super fund members, specifically in relation to group insurance. The recent ASIC Report 673, which is based on findings by Susan Bell Research following 50 face to face qualitative in depth interviews conducted via Zoom, sets about identifying the issues faced by every day super fund members when inquiring about their insurance.
According to the report,
‘since default insurance is ‘group’ insurance, it has therefore been designed to meet the needs of large numbers of people and may not suit a particular individual. Potential barriers to a more streamlined customer experience included ‘bundling of products, differences in terminology across the industry, and variations in claim processing.’1
Member Inquiry Process
ASIC discovered that there are usually up to four reasons or ‘triggers’ for why super fund members will inquire about their group insurance; either because of certain actions taken by the super fund (issuing quarterly statements etc), life stage changes (getting married or travelling), life events (such as illness or death) or exposure to other financial information. For many of the interviewees, their ‘journey’ was a fact-finding exercise. They wanted to check what insurance cover they had. Some wanted to find out what policies they had, what they were covered for, and how much it cost. Others wanted to find out what they could change, and how much that would cost.
‘Typically both superannuation and insurance were back of mind. In general, members were more aware of their superannuation – their balance and the fees – than they were about their insurance.’
Though most of the interviewees found the process of inquiring about their insurance through their super fund to be easy or straightforward, the research confirms that for many members, very little is actually known about their insurance. Perhaps unsurprisingly,
‘some members discovered that they had default insurance which did not seem to be adequate for their needs. Some discovered that their cover was much less than they thought it was. Some discovered that they were paying for insurance inside super when they already had some outside super.’
Generally, super fund members experienced difficulty when inquiring about more complex issues which required advice of some sort. Not all information was readily accessible or easy to find. Accordingly, the research ‘highlights potential improvements that could be made to the members’ experiences.’ Specifically, helping members understand, among other things, the
‘differences between the insurance products on offer, the differences between insurance inside and outside super, changes in insurance needs over the course of their lives, whether you can claim on more than one policy, and the implications of pre-existing conditions on switching.’
‘The challenge is for the super funds to prioritise a straightforward approach to answering the most common questions and to test the usability of their approach.’
Practical Steps for Improvement
Some practical suggestions for super funds to improve the member’s overall experience in this regard include:
- providing calculators on all super fund websites to help members ‘work out how much cover they need and how much it would cost’;
- reminders to check insurance cover when starting a new fund or changing jobs;
- case studies on websites to ‘demystify and clarify some often-asked questions’ such as ‘what types of insurance do I have in my super?’ or ‘what does each type of insurance cover?’;
- support staff to guide members on the phone through the website process; and
- more transparency in gaining access to advice (members did not seem to know what or who to ask for or what the financial or other implications might be).
The report notes that:
‘many of the problems experienced by members would probably have been avoided if the member had known where to find the information that they needed, in particular on the website, and if it was easy to understand’. Importantly for super funds, ‘there is now a fairly general expectation that the super website will contain much information, but the level of accessibility varies with fund.’
ASIC Report 673 clearly identifies the need for super funds to increase their engagement with fund members and streamline the information process. As with all things, product offerings and the environment in which they are offered can change rapidly, leaving the onus on fund members to do their own research to better understand their insurance needs over the course of their lives.
This report highlights the extent to which super funds can take additional steps to improve the process and assist their members in this regard, thereby ‘reducing the necessity for double contacts and to make members more confident.’ Ideally, super fund members can determine whether they are adequately insured and if not, take the appropriate action to increase their cover inside super or seek cover elsewhere.
Ultimately ASIC Report 673 confirms that which we already knew; that some fund members have little understanding or insight into their insurance (provided through super). Nevertheless, the report provides some specifics around this and identifies those areas in which super funds can meet the expectations of fund members going forward which more often than not, can be remedied through rather inexpensive and simple practical solutions. Again, ‘engagement’ with members is the key and as highlighted above, the challenge has been laid down for super funds to ‘prioritise a straightforward approach to answering the most common questions and to test the usability of their approach’.
1ASIC Report 673