Insurance in Superannuation Newsletter: Sept Qtr 2017 | KPMG | AU
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Insurance in Superannuation Newsletter: September Quarter 2017

Insurance in Superannuation Newsletter: Sept Qtr 2017

In this newsletter we review APRA’s latest quarterly statistics on the profitability of the superannuation insurance sector at an aggregate and a product level, as well as explore how superannuation funds can get the best possible premium rates for their members in an insurance tender.

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Key insights

  • Superannuation group lump sum profits decreased during the quarter, remaining at historically low levels. This reflects that profits decreased from $78m in the June 2017 quarter to $61m in the September 2017 quarter, compared with 2015 average of $72m.
  • Superannuation group disability income profits remain volatile. The September quarter loss of $1m was the first reported loss in the past five quarters.

Observations

The newsletter outlines the components of group risk premiums and their level of judgements and uncertainty in group insurance pricing.

Up to 50 percent of the premium is uncertain and requires actuarial judgment and assumptions. Examples of how superannuation funds can get the best possible premium rates by:

  • providing detailed, complete and accurate claim and member information
  • understanding why the claims experience of the fund is better or worse than the industry, and how the insurer will interpret this information when setting adjustment factors
  • obtaining a breakdown of the premium quoted, and an understanding of key judgements and adjustments made.  

Insurance in Superannuation Newsletter

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