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 How Equisoft/manage Solves Superannuation Challenges in APAC Life Insurance

Article highlights

  • What is a superannuation fund?
  • What are the benefits of a superannuation fund?
  • What are the benefits of having insurance attached to a superannuation account?
  • Superannuation challenges for insurers
  • How is Equisoft/manage customized to fit the Australian life insurance industry?

Insurance products are vital to the peace of mind required for a healthy, functioning society. People need to know that they will be protected if unexpected, unfortunate circumstances arise.

What is a superannuation fund?

Within the Australian market, most insurance policies are provided to consumers as an extension of their superannuation products‒a mandatory requirement for all working adults aged 18 to 65.

Every time an employee receives a paycheque, employers are required to contribute 10.5% of that amount to the employee’s superannuation. The fund trustees are obligated to invest this money on behalf of the member, according to a strategy of the member’s choosing.

The Purpose and Benefits of Accessing a Superannuation Fund

Superannuation funds are held in trust until an individual meets a condition of release, which may include reasons such as accident, injury, death, first home buyer assistance, or financial hardship. However, the most common reason for accessing the fund is retirement at the age of 67. At this point, members can choose to convert their accumulated superannuation funds into a pension product to provide a steady stream of income. The purpose of superannuation is to act as a form of insurance against financial difficulties during retirement, which is why the Australian government mandates it for all employees. By reducing dependency on government pensions, it provides greater financial stability and peace of mind for retirees.

The Intersection Between Superannuation Funds and Insurance Companies

Insurance provided through a superannuation fund is a reliable way for members to secure financial protection for their loved ones in the event of an unforeseen circumstance or accident. To facilitate this, most superannuation funds form partnerships with insurance companies, offering their members group policies at a reduced premium for common coverage such as Life, Total & Permanent disability, and Income Protection policies. As superannuation is primarily focused on retirement, having a life policy attached to the account can provide members with the peace of mind that their family will be provided for in the event of their death. This is especially true for industry super funds that specialize in catering to workers in specific industries, such as construction, hospitality, or medicine, where workers may be at higher risk of injury. TPD policies provide financial security in the event of disability, and income protection can support those who experience temporary disability or job loss. While members can generally choose their own policy arrangements, some funds require certain policies to be linked, creating differentiation in a market heavily regulated by the government.

Superannuation challenges for insurers

As a national requirement, the superannuation industry is heavily regulated and legislated to ensure fair and standardized conditions of operation and execution. Multiple national watchdogs monitor and control everything from fund processing times to reporting requirements to various governing bodies. However, many insurance companies prefer not to get entangled in this complex and challenging aspect of the industry, yet still wish to provide policies to super funds.

To manage this, many insurers operate multiple software platforms simultaneously to comply with regulated sending and receiving of superannuation money to and from their systems. This allows them to maintain insurance contracts in their software while keeping the super fund in its own platform.

Nevertheless, we are increasingly seeing retail insurers enter the super space and establish their own retail super funds to streamline transfers and improve the customer experience. However, cross-system operations become challenging, processes slow down, and complications arise when data cannot seamlessly transfer between systems tailored for different financial products.

How Can Equisoft Help?

Equisoft has solved this issue with our powerful and flexible Equisoft/manage platform, now customized to meet the unique requirements of the Australian Life Insurance industry.

The Equisoft/manage platform has been highly rated for its flexibility by Celent in their ‘Insurance Technology Trends and Insuretech in Asia Pacific Series’.

As part of technological provision for ‘Super’ products management Equisoft provides localized integration and regulatory compliance for ‘SuperStream’, the ATO and Bank
The Equisoft/manage Platform SaaS service provides companies the ability to administer or integrate with APRA regulated Superannuation funds using the unique superannuation identifier (USI) and SuperStream standards. The platform offers features to administer superannuation for APRA regulated funds, digital services providers, self-managed super funds and clients of Electronic Service Address including Superannuation Clearing Houses and Hubs.

In under a year, Equisoft successfully localized an international Life Insurance and Annuities software solution for the Australian market, ensuring compliance with legislative and regulatory requirements, as well as seamless integration with other insurance and regulatory platforms. The result is a "one-stop-shop" for insurance carriers that facilitates their operations.

The core Equisoft/manage platform's flexibility allows it to adapt to legislative changes and interface more easily with the systems and reporting requirements of regulatory bodies such as APRA, ASIC, and ATO. This ensures maximum straight through processing possible and boosts operational efficiency.

As noted by Celent:

The platform offers superannuation integration features that are specifically targeted at insurance carriers and other service providers who otherwise sell or administer insurance both inside and outside of superannuation.

In addition, the Equisoft solution offers unique benefits that set it apart from other platforms in the market. Unlike superannuation-specific platforms that lack essential insurance features or insurance platforms that cannot process SuperStream messages for super money, Equisoft/manage combines insurance and superannuation capabilities into one seamless system. This feature allows for streamlined processes and tight control over the timing and sequencing of each activity. Moreover, the platform provides targeted features to operate insurance out of the superannuation space, which ensures compliance with regulatory requirements and efficient reporting to regulators.

Features that support such an integrated offering include:

  • Customer, Advisor, and Distribution self-service capability through an integrated front end.
  • High-quality data validation through the ATO SuperTICK, SMSF Member TICK, and Fund Validation Service or FVS.
  • Mandatory member and transaction reporting to the ATO are supported via MAAS, MATS, and GL reports.
  • Extensive payment and refund capabilities including BPAY, debit, credit, or any available SuperStream; ISO 20022 or NAB New Payments Platform standards.

Equisoft/manage is a modern, integrated Insurance policy administration system that supports ownership of insurance products linked to superannuation with legal ownership split across multiple entities within a single consolidated policy for simplification in operations. This combined with a complaint and secure SaaS platform deployment makes a truly compelling offering.

A special thanks to Justin Robb for his contribution to this article.

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