Olivia Sarah-Le Lacheur

CommInsure has enhanced its underwriting offer with a new tele-interview service and upgrades to its underwriting rules to improve adviser productivity.

The improvements are part of a wider program designed to deliver a more seamless and efficient experience for advisers applying for a client’s life insurance cover.

Advisers will now have the option to request CommInsure collect information from customers directly to complete their personal statement for life cover. A dedicated Australian-based specialist tele-interviewing team will collect all the information needed in a single call. This will reduce advisers’ compliance burden and risk exposure, and free up more time for them to spend with their clients.

CommInsure has also upgraded its existing rules for underwriting, increasing auto-acceptances to include loadings and exclusions and refreshing underwriting guidelines to reduce unnecessary referrals within CommInsure’s online application tool, WriteAway.

Olivia Sarah-Le Lacheur, Head of Life Distribution at CommInsure, said the enhancements were designed to improve advisers’ productivity by providing more choices when applying with CommInsure.

“These enhancements are the first phase of a broader program designed to create a simple and seamless application experience for advisers and their clients. We’re transforming our digital business platforms to complement the significant product enhancements we released in November 2016.”

In delivering these enhancements CommInsure ran a pilot program with a number of advisers who provided feedback over a nine month program.

Advisers can ask for CommInsure’s tele-interview service through CommInsure’s online application system, WriteAway, with timeslots available Monday to Friday, 8am to 8pm Eastern Standard Time.

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The program, which was launched across CommInsure’s Group and Retail claims teams in August 2016, and is now standard business practice, has been developed to ensure best practice recovery principles are factored into the claims process for customers claiming for mental illness.

Head of Claims Solutions, Ciaran Curley, said the program is unique to others in the market because of the focus on supporting a client’s full recovery, rather than just focusing on their return to work.

“Successful recovery requires a tailored approach with a holistic lens to encompass the full breadth of an individual’s life,” Mr Curley said.

“So we developed a program where a CommInsure case manager and rehabilitation consultant work closely with a client and their general practitioner or psychiatrist to develop a personalised Wellness Plan where goals and milestones are agreed to by all parties.”

In developing the program, standard claims processes were reviewed and contrasted with best practice standards. Feedback from customers, doctors and rehabilitation providers also assisted with improvements to Wellness Plans to better meet customer needs.

• The three key principles of the program are:
• A simple and straightforward claims process, focusing on recovery and positive discussions rather than administration and incapacity levels;
• Dedicated support for clients from highly skilled professionals, resulting in a deep understanding and a tailored service;
• Consistent collaboration with all involved parties to facilitate an optimal treatment plan and identify and remove any recovery barriers.

“The program helps the client re-engage with their community and includes ‘stay well’ strategies, such as a response plan in case the client experiences a relapse or unexpected deterioration of symptoms. We also waive monthly claims forms and instead agree with the client a series of milestones that we aim to achieve through the program,” said Mr Curley.

Since launch, more than 130 customers have been referred for the Back to Wellness Program and outcomes to-date include full and partial return to work, commencement of voluntary work or study and job-seeking. Many customers are currently completing their second and third Wellness Plans.

CommInsure will shortly undertake the first phase of a six-monthly review for customers that commenced the ‘Back to Wellness Program’ in August 2016. Feedback will be obtained regarding satisfaction with the program and its perceived success in empowering customers to achieve their own personal recovery and return to work goals.

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The report established that various improvements have been made in the CommInsure business over the past year.

We will be examining the findings closely as we always know we can do more to enhance the customer experience. We recognise the industry is evolving and we expect, and will advocate for, further industry reform to make life insurance simpler and better for customers.

ASIC’s report found:

• No evidence to support allegations that CommInsure claims managers applied undue pressure on doctors to change or alter their medical opinions
• No evidence of ‘cherry picking’ doctors to give preferred opinions
• No breaches of the law in relation to claims handling
• No significant increase in surveillance by CommInsure in the relevant period and that the figures quoted to support the allegations raised were inaccurate. The report found the trigger for, and use of, surveillance to be reasonable in each instance
• No evidence to suggest that medical opinions stored on the database were deleted or altered by staff outside the Medical Risk Team, other than for appropriate administrative functions. Furthermore the database was not the main record keeping tool for customer claims and there was no evidence that medical opinions had been removed from hardcopy claims files.

In May 2014, CommInsure’s heart attack definitions were consistent with a number of competitors, but the majority had changed their definitions. In March 2016, we accelerated a planned update to our heart attack definition and backdated to May 2014. As a result we have paid $2.5 million to 17 eligible customers based on the changed definition.

We take our responsibilities seriously and having carefully considered ASIC’s commentary we will extend our updated heart attack definitions back further to include customer claims from October 2012. We believe this is the right decision for our customers in the absence of consistent definitions across the industry.

We will continue to advocate for:

• Industry initiatives to achieve a better balance between retirement outcomes and life insurance
• The use of plain English and regulatory assistance to implement standardised definitions
• Changes to make it easier to rationalise legacy products and reduce the costs to customers.
  Our focus continues to be on supporting customers in their time of need. In 2016, CommInsure paid over $1 billion in life and income protection payments to around 20,000 customers – that’s $2.7 million every day.

CommInsure customers who have any questions or concerns about their CommInsure policy are encouraged to contact us directly on 13 10 56.

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The partnership will take effect on 1 May 2016.

Lachlan Baird, Chief Executive Officer, Prime Super said “This is an exciting change to the Group Life Insurance arrangements for Prime Super. Our goals in undertaking this tender process were to simplify and streamline our offering, to improve the sustainability of premium pricing for our members and to ensure we were offering an appropriate level of cover.

“Prime Super has recently undertaken a significant re-branding process to modernise the look and feel of the fund as well as emphasise the core value of the fund, where the best interests of members is at the heart of everything we do. These new insurance arrangements deliver on the core values of the fund,” Mr Baird said.

Craig Harrison, General Manager Life Product and Distribution, CommInsure said, “We look forward to working with Prime Super to deliver long term value to their members. To be appointed as Prime Super’s insurance partner is a significant achievement for CommInsure, and we are committed to providing a tailored product, claims and service model to meet the insurance needs of Prime Super’s members.”

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Greg Ballard

In an industry-first for platforms, CommInsure the life insurance business of the Commonwealth Bank, yesterday launched a range of annuities via Colonial First State’s award-winning FirstChoice and FirstWrap platforms.

Greg Ballard, General Manager Superannuation & Investments, CommInsure said it was an important milestone for the annuities industry as financial advisers, for the first time, have access to annuities via retail platforms and will have greater access to retirement income solutions.

“We’re delighted to announce that CommInsure annuities are now available for investment via FirstChoice and FirstWrap platforms. Advisers and their clients will now be able to access the strength and trusted brand of CommInsure annuities from one integrated front end.

“Importantly, financial advisers can more efficiently combine Colonial First State’s account-based pension with a CommInsure annuity and to address market, sequencing and longevity risks,” Mr Ballard said.

According to Investment Trends Retirement Income Report[1], 44 per cent of pre-retirees aged 40 and over expect to outlive their retirement savings. Among those who would consider investing their money in annuities, 66 per cent cited barriers to doing so. The most commonly cited barriers are not knowing enough about them (28 per cent), too complex (16 per cent) and lack of adviser recommendation (16 per cent).

George Lytas, Head of Annuities, CommInsure said, “Making annuities more accessible is an important part of our strategy. By offering our annuities on Colonial First State’s platforms we can more easily reach a wider target market, particularly advisers who are at the forefront of providing retirement advice and are essential to driving greater awareness and take up of annuities.

Optimising income in retirement

According to Lytas, “While the optimal solution will differ for each client, research shows that a ‘layered approach’ or combining the age pension with an account based pension and a lifetime annuity can provide superior outcomes for Australians in retirement. We know that half of all people will live beyond their life expectancy so planning for living longer is important,” he said.  

“A combination of a CPI-indexed lifetime annuity with the age pension can be used to help meet the customer’s basic living expenses. The remainder can be invested in an account based pension to meet the customer’s desired income until the account balance is depleted over time. This combination can offer a better outcome from a total income perspective over the life of a retiree,” Mr Lytas said.

Recent research from Ernst & Young and Colonial First State found a 67 year old single male with $400,000 in super and seeking to live on $43,000[2] per annum could be up to $20,000 better off over their retirement if they invested 25 per cent in a CommInsure lifetime annuity and lived five years beyond their life expectancy[3]. If the same male invested 50 per cent in a CommInsure lifetime annuity he would be around $50,000 better off if he lived five years beyond life expectancy.

A 67 year old couple with $500,000 in super and seeking to live on $58,000 per annum could be up to $60,000 better off over their retirement if they invested 25 per cent in a CommInsure lifetime annuity and lived five years beyond their life expectancy. If the same couple invested 50 per cent in a CommInsure lifetime annuity they would be up to $120,000 better off if they lived five years beyond life expectancy.

CommInsure recently announced enhancements to its annuities offering, providing more competitive rates across its full range of annuities including short term, long term and lifetime income annuities and reducing the minimum investment amount for CommInsure annuities to $10,000.

“The features, benefits and rates of our annuity products accessible via the FirstWrap and FirstChoice platforms will be the same as investing in stand-alone CommInsure annuity products,” Mr Lytas said.

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[1] Investment Trends, Retirement Income Report, November 2014

[2] This level of income is approximately equal to the ASFA comfortable income level for individuals. This represents the annual income needed by Australians to fund a comfortable standard of living in retirement, as estimated by ASFA.

[3] Colonial First State and CommInsure analysis with Ernst & Young assumes single male life expectancy of 89 and heterosexual couple life expectancy of 92; assumes 80/20 growth/defensive asset allocation for the non-annuitised component of the portfolio and a 60/40 asset allocation overall including the annuity; assumes expected levels/asset returns (p.a.) of CPI 2.5%, Average Weekly Earnings 3.5%, Cash rate 4.2%, Fixed income 5.1%, Australian equity 7.8%, Listed property 7.8% and International equity 8.2%; assumes account based pension ongoing fee of 1.0%pa; assumes Age Pension rules as at 19 June 2015.

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Mr Lytas brings over 20 years’ experience to CommInsure, most recently as Acting Head of General Insurance for BT Financial Group. Prior to joining BT in 2011, George spent five years in ING’s Wealth Management business in several roles including Head of Product Development where he led a team responsible for the development of retirement income and investment solutions for the Australian market. George has also held senior roles with AMP, Colonial and the Royal SunAlliance Group.

Greg Ballard, General Manager of Superannuation and Investments, CommInsure, said, “We are delighted to appoint George to help drive growth of our Annuities business. George brings a wealth of knowledge in the development of retirement income solutions for the Australian market. He joins our business at a pivotal time in the industry where there is increasing demand for guaranteed retirement income products, such as annuities, which can help provide adequate savings in retirement.”

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