Sean McCormack, Chief of Group & Retail Partners, MLC Life Insurance
Following the Royal Commission and subsequent regulatory changes, the life insurance industry has an opportunity now, more than ever, to improve member engagement – to put the member’s interests first, in both in the quantity and quality of our engagement with them.
Without the right type of engagement, life insurers and superfunds will fail to fully address members’ needs.
What do members want?
Life insurance is a low engagement, high impact industry. This is driven by the following factors:
- The majority of Australians obtain life insurance in one of two ways:
- They are defaulted into it via our world leading superannuation system; or
- They see a financial adviser, which leads to the placement of insurance.
- When an illness, injury, accident or death strikes, life insurance provides invaluable financial support.
Given this, life insurers and superfunds must strive even harder to achieve engagement.
Members want super and life insurance that is contemporary. They want digital experiences that are tailored for them – that suits their individual needs and are quick, simple and convenient. They want similar experiences like they already have with UBER, Amazon and Netflix, as well as products and services beyond basic super and standardised insurance.1
For communications to be effective in engaging young members (18 to 29 years old), our recent research has shown that it needs to be:
- Early and “loud”;
- Educational and simple;
- Value focused; and
Further research we’ve commissioned into customer experience has told us members want clarity and simplicity around products and benefits. It also highlighted that there is a need to reinforce the value of insurance and do it in a way that is relevant and tangible to new members.
How well have life insurers and superfunds engaged with members?
The Australian Government’s recent introduction of the Protecting Your Super (PYS) reform package is a recent example which spurred strong member engagement.
Following this reform, we commissioned research that revealed that nearly half (48%) of Australian superfund members have heard of the reform.
These results came after a significant industry-wide campaign to raise awareness of the changes to life insurance inside super and prompt members to take action. Among Australian superfund members, 41% have taken some form of action including one third (30%) of Australians who contacted their superfunds about the reform and 35% elected to keep their life cover.
We partnered with our superfund client, Vision Super, as part of their PYS campaign, to support the fund during a two-week calling campaign to their members.
We worked with Vision Super to come up with a tailored solution, providing temporary customer service representatives to help them contact members about the PYS changes and its impacts.
This extra support saw many Vision Super members opting in to keep their life insurance – highlighting the importance and value of engaging with members.
How do we engage with members, so they make an informed choice?
The set and forget mentality of life insurance is a challenge for the industry. We know that members are reminded of the importance of life insurance at trigger events in their lives such as getting a home loan, starting a family or when tragedy strikes them or their loved ones.
We want to provide good and affordable life cover. The steps and decisions members take at the start of their super and life insurance journey can impact on long-term outcomes in retirement or if a tragic event should occur – the better the engagement, the better the retirement outcome for the members.
One of the things we’ve done, is improve the way technology is used to enable members to easily connect with their life cover, so they can make changes simply. Our LifeView platform creates a seamless insurance experience for superfunds, trustees, administrators and members from application through to claims. This is part of a broader $600m technology investment; including digital and data, infrastructure, and support services to better serve our superfunds and their members.
More can be done to improve member engagement. Life insurers and superfunds can lift engagement and, in turn, build trust and loyalty.
Looking to the future, life insurers and superfunds must continue to work together to better understand members and deliver fit for purpose products – all while interacting with members about their insurance; what they want, how they want and when they want.
1 KPMG 2019, Super Insights 2019 - KPMG Super Insights Report, viewed 12 September 2019, KPMG, https://home.kpmg/au/en/home/insights/2019/04/superannuation-insights-2019.html
About MLC Life Insurance MLC Life Insurance is a specialised life insurance business, operated by MLC Limited. Nippon Life Insurance holds a majority 80% of the shares in MLC Limited. The Australian-led and managed business aims to leverage Nippon Life’s global presence, built over 133 years, alongside MLC Life Insurance’s significant experience in understanding and meeting the insurance needs of everyday Australians since 1886. MLC Limited is part of the Nippon Life Insurance Group. MLC Limited is not part of the NAB Group of Companies. For more information on MLC Life Insurance, visit mlcinsurance.com.au