Take insurance out of superannuation, says major insurance broker

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A national community-rated and priced insurance plan could serve your clients better than group coverage within superannuation funds, according to a large insurance broker. 

Matthew Brown of Aon Hewitt, the HR outsourcing and consulting arm of broking giant Aon, has suggested there is merit in pondering such a national scheme. 

“It's time to stop and think where we're headed," said Brown at the AIA Australia Group Insurance Summit held in Sydney. “The data issues [of the past 20 years] are not insurmountable, and it's time to step back and perhaps take insurance out of superannuation.” 

Brown said national insurance could solve Australia’s massive underinsurance problem and he referred to New Zealand's KiwiSaver system and to that country's panel of insurers which spread the risk of insurance. 

Premiums would continue to come out of the compulsory superannuation guarantee and each super fund would forward contributions to the nationally administered system, added Brown.

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