Insurance design and claims handling trump price

Benefit design and claims handling represent the two most important considerations for superannuation fund executives when selecting their insurance providers, according to new research conducted by Money Management's sister publication, Super Review.

The research, conducted during last year's Association of Superannuation Funds of Australia (ASFA) conference in Melbourne and sponsored by Pillar Administration, has demonstrated a significant 12 month shift away from the notion that price is the dominant criteria for funds award insurance mandates.

As well, the research appears to reflect the recent issues which impacted the profitability of the major life insurers and saw them driving up premiums over the past 18 months.

Asked to detail what represented the most important consideration when selecting an insurance provider, price rated behind both benefit design and claims handling as being the most important issues.

More than 40 per cent of respondents rated benefit design as being the topped rank factor in their consideration of providers, while only slightly fewer noted the importance of claims handling.

By comparison, while price was regarded as being important, it was ranked at a lower level of priority.

The Super Review survey conducted a year earlier, revealed that more than 50 per cent of respondents saw price as being the important factor with claims handling being relegated to third behind benefit design.