My name is Annabel Spring and I am the Group Executive of the Commonwealth Bank’s Wealth Management business. I am appearing today with Helen Troup, Jo Brennan and Craig Harrison. 

Helen is the Managing Director of CommInsure and has previously appeared with me before this Committee. Jo Brennan is the General Manager of Life Customer Solutions. Jo looks after our call centres, claims management and underwriting and Craig Harrison is the General Manager of Life Product and Distribution. 

Thank you Chair for the invitation to appear before you today.

Earlier this year we appeared, as you mentioned, before the Committee and explored ways to enhance understanding and confidence in this critical industry sector and we look forward to talking about that in more detail today. 

We also discussed the various concerns that had been raised about CommInsure.  As you may remember, we had independently and thoroughly investigated the issues and there was no evidence of systemic issues with declined claims and nothing to support the concerns of wilful or widespread misconduct. ASIC and APRA have investigated and their findings are also at odds with some of the commentary. 

Now undoubtedly, we made some mistakes, we have fixed them, and we have learnt from them. We are committed to doing the right thing for customers and will be happy to talk about the improvements we have made. 

Life insurance supports customers and their families at the most difficult times in their lives. CommInsure paid over $1 billion in claims to over 20,000 customers last year and we’re continuing to listen to our customers and continuing to improve their experience.

Since we last appeared, you may have heard CBA’s announcement that we are in discussions with third parties about their potential interest in our business. There are a number of options under consideration including retaining the business and the review is ongoing. 

This Inquiry has provided a greater understanding of the industry and how to improve it for the benefit of customers and we have listened carefully. 

Many of the themes highlighted to the Committee are common across most industries; changing customer expectations, regulation, technology and competitive models.  

But some are specific to insurance, in particular balancing retirement outcomes and protection needs, greater awareness of mental health issues and privacy issues and advances in medical knowledge.

During the period of this Inquiry we’ve seen many positive changes: the Life Code of Practice has been established, Life Insurance reforms have been passed and the Insurance in Super working group is well on its way to developing a new set of standards. 

But there’s still scope to do more. Today we’d like to put forward four proposals for the Committee to consider.

The first three come under the broad heading of reforming the settings of life insurance policies held through superannuation funds. The introduction of life insurance to superannuation has provided a safety net for millions of working Australians. However we do believe it’s possible to make the benefits clearer, and better targeted for those who have a different balance between retirement outcomes and insurance.

The first three of these reforms come under the broad heading as I said of reforming the settings of life insurance held through superannuation funds.

Firstly, for all customers - we can address the low awareness of insurance cover within their super by providing members with more visibility of their insurance cover through the myGov website just like superannuation so the type of policy and the cover that it provides.

Secondly, for younger customers (say between 18 and 21) – the proposal is that life insurance in super should be opt-in to help protect their superannuation balances, also given their lower propensity to claim and generally more limited financial responsibilities. 

Our third proposal is for a standard Total and Permanent Disability definition.

CommInsure supported the Life Insurance Code of Practice where standard minimum definitions now cover 80 per cent of trauma claims.  

However, it can go further. This proposal would also facilitate portability across superannuation funds and ensure that super consolidation does not jeopardise an individuals’ basic coverage. 

Our final proposal relates to funding for rehabilitation. Allowing insurers to fund rehabilitation for customers supports them to return to their normal activities faster. It reduces pressure on the health system and the risk of mental health issues that so often come with an inability to return to work. 

We encourage the Committee to make a recommendation for legislative reform that would allow Insurers to make rehabilitation payments when it’s in the customer’s best interests.

We look forward to discussing these proposals to deliver better outcomes for customers with the Committee and to answering any questions you may have for us.