Leading innovation in the insurance industry

TAL’s success in the last two months in the group insurance space has been immense, as it both retains and gains key super fund mandates. A common reason cited amongst those it partners with for its selection has been its ability to innovate to respond to both member and business needs.

The insurer’s chief information and innovation officer and the Money Management/Super Review Women in Financial Services 2018 Life Insurance Executive of the Year, Fiona Macgregor, has led TAL’s charge on the innovation front.

Appetite for innovation

While insurers have always been pushed to innovate – which Macgregor points out goes beyond being about tech and start-ups and rather about solving customer needs or frustrations – demand has been growing recently.

According to Macgregor, this is stemming from wider conversation on community expectations and getting the best outcomes for members.

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“We take the view at TAL that a culture that encourages innovation and the capability to deliver on it are at the heart of being able to keep pace with community expectations,” she says.

“The start point [of innovation] is always customer need. From that as the start point we all have to look end-to-end through our businesses – does everything that we do give Australians confidence that their insurance in their super will work when they need?”

To achieve this, Macgregor recommends talking directly to customers to work out their needs, rather than sitting behind the glass in a focus group, and embedding innovation in the company’s culture.

TAL, for example, has an in-house innovation team that runs jointly with the team members of its super fund partners to solve customer problems, and hosts annual employee innovation challenges to “get people thinking about innovation in their day job”. This latter activity led to the launch of TAL Claims Assist.

The need for change

To start, group insurers (and the super funds they work with) need to offer innovative solutions or adaptations because, simply, super fund members increasingly expect.

“At the customer service level, I can track my pizza delivery or my Uber, so I expect to be able to track something really important like my claim,” Macgregor says.

Then, the industry is also aware of the need for sustainability. Macgregor notes that there are “more and more” of us living with chronic conditions and mental illnesses, and insurers’ product designs and economics need to reflect that.

“This creates the potential to fundamentally shift our role in life insurance from one of purely protection to one that also focuses on prevention,” she says.

Finally, there’s “a lot of promising tech out there and smart start-ups demonstrating the potential” of innovation in improving business models and offerings, Macgregor says.

“Regtech, for example, is very promising and, in particular, applications of artificial intelligence to enable 100 per cent quality checking. That’s good for members,” she believes.

Proof is in the pudding

If TAL’s success in nabbing group insurance mandates isn’t proof enough of the benefits of innovation to insurance offerings, the work Macgregor and her team did in the roll-out of the Protecting Your Super (PYS) reforms and the removal of group cover to inactive accounts is.

“One [customer outcome from innovation] that stands out for me is the work we’ve done recently at TAL to white label our marketing automation capabilities from our Direct business to help a number of our super fund partners tackle the pressing need for member engagement on the PYS changes,” she says.

“As a result, the uptake of people opting back into insurance through super has far exceeded our original expectations.”