Superannuation funds should undertake an annual insurance data validation exercise on member, premium, and claims, given the life insurance and super industries have previously worked off poor data, Rice Warner believes.
An analysis by the research house said while data had improved recently most, if not all, data would have some missing or conflicting values, ambiguity, and a lack of granularity which had widespread implications such as compliance with SPS 250 insurance in super requirements.
It said it was becoming more common for service level agreements between funds and their insurers to now include specifications for every data field which needed to be captured and what level of data audits would be completed by the insurance, including independent reviews.
“Funds should review their data management practices and consider revising their data-sharing requirements with insurers to ensure they can access the data required to monitor member outcomes,” it said.
Rice Warner noted that while funds had some success in establishing regulator reporting with key employers to confirm members’ occupation and work status, they needed to build their own processes around this including how to efficiently update their administration systems.
“We also encourage funds to perform regular audits and training exercises to ensure data is collected accurately, particularly because the increasing focus on more complex data requirements may lead to an increased risk of administrative errors,” it said.
“Superannuation funds are dependent on the underlying administration software they use and for many funds, the external third-party administrators (TPAs). The number of distinct providers in this space is very small with only two major TPAs and six major software providers.
“Given there is a concentration of providers, and also only five large group life insurers, it should be possible in the future to develop an industry portal to handle group life data more efficiently.”
It said the benefits of high-quality data included the ability to provide optimal member outcomes, early insights into claims experience, trends and pricing impacts, and overall compliance with SPS 250.