Research report highlights hurdles with super insurance
A research report undertaken by ASIC has found that the process of making changes to, or gaining information on, insurance held in a super fund presents several challenges for members.
A recent research report released by ASIC has found that after interacting with their fund in regards to their insurance arrangements, around a third of participants in the study felt confused, overwhelmed and uncertain.
The research report involved 50 in-depth interviews with superannuation fund members who, in the last year, had reviewed the level of their insurance cover.
“They found insurance complex and difficult. Some discovered information they did not understand or did not know how to respond to,” the report stated.
“This often caused them to delay in engaging further with their fund on insurance after their initial interaction.”
The research also indicated that while most members expected it to be a simple self-service process, this was not the case.
According to the report, only around half of the members interviewed completed the action they intended to complete to their satisfaction.
“However, others were left ‘in limbo’. These members had discovered information but they did not understand it or did not know what to do about it,” the report said.
“Some had discovered that they were unable to make the change they wanted. Some then wanted to discuss it with their partner or a professional adviser. Others said they still needed to do more research.”
Some members also felt that it was an onerous process, which was also made difficult by the lack of online resources.
“On the other hand, some members had tried unsuccessfully to have quite complex questions answered through chat, the app or the website only, because the member did not want to contact the fund by phone. For some, the encounter felt pushy or with a sales focus,” the report said.
ASIC said the research highlights some of the challenges for superannuation funds, such as providing more tailored information for members.
“At the same time, there is an opportunity for trustees to significantly improve their members’ experience by improving communication to members about insurance, including on their websites,” said the corporate regulator.
“Many of the problems members experienced may have been reduced or avoided if the information they sought was easy to find, clear and balanced.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.