In its Superannuation and Insurance Pulse Survey, Aon Hewitt found only 38 per cent of Australian companies were aware premiums are due to rise, and of those companies, “more than half” did not know how much the increase will be.
Aon Hewitt’s retirement and financial management team principal, Ashley Palmer, said the reason why organisations are unaware is that there are “challenges within the life insurance market”.
“Many organisations are unaware that premium increases are on the cards because they have premium guarantees in place,” Mr Palmer said.
“They may therefore not be informed of the likely increases in premiums by their insurer or super fund until the guarantee is due to expire.”
Mr Palmer also said nearly 40 per cent of companies have “no intention” of undertaking a review of their corporate superannuation and insured benefit arrangements.
“When you think about the effect of MySuper and the insurance changes together, it is astounding that nearly 40 per cent of organisations have no intention of undertaking a review of their corporate superannuation and insured benefit arrangements to understand the possible effects,” Mr Palmer said.
“Potential benefits of conducting such a review are many, and include identifying cost savings, harmonising approaches, removing or de-risking legacy arrangements and implementing consistent and competitive insurance arrangements for all employees.
“The bottom line is that superannuation and related insured benefits are an expensive and highly regulated component of an employee benefits package, so taking steps to maximise the potential return on this major spend and communicate it effectively is crucial for success,” Mr Palmer said.
