The rain is continuing to fall on Comminsure’s group insurance parade with industry fund TWU Super pulling its contract from the Commbank subsidiary and choosing TAL in its stead.
TAL will now provide life and total and permanent incapacity cover to TWU Super fund members. It comes two months after NGS, the $6 billion industry fund based on the education and community sectors, walked away from Comminsure after 28 years. It too will now rely on TAL for group insurance
A third super group, CareSuper, also quit CommInsure in August, choosing Metlife as its new provider after it won a tender which included the criteria of “claims philosophy and processes”.
Mid year Comminsure was hit by accusations of unethical behaviour and poor behaviour which included claims doctors were pressured to avoid claims payment. TWU Super said it held a competitive tender for its $50 million contract, which serves about 120,000 members in the fund which has $4.5billion in funds under management.
“A priority for TWU Super in reviewing its group insurance provider was to identify and partner with an insurer that has an aligned culture, and demonstrates a long-term commitment to the market”, as well as leading claims management track record, a statement from the company read.
“Changing service providers is never an easy decision to make. However, the services TAL offered in supporting the TWU Super members and assisting the fund to achieve its objectives were appealing and compelling,” chief executive Frank Sandy said.
“Insurance is a critical area of the Fund’s offer and delivers real value to the membership and as such is a key strategy for the Fund. We are excited by the partnership with TAL as we believe they will deliver leading technology and processes to support the membership, especially at claim time where they need it most,” Mr Sandy said.
CommInsure managing director Helen Troup said industry fund tenders were competitive but the company was focused on future business leads, a report in The Australian read.
“While we are disappointed to lose clients from time to time, we are also committed to working very hard to earn new mandates,” Ms Troup said.
Several sources in the employee and union-backed industry super fund sector have suggested it is unlikely CommInsure will be selected by many industry funds for future business.
Prior to the contract losses, CommInsure provided group insurance cover to about 3 million Australians, through nine industry and two public sector super funds. The loss of the three contracts will cost the group about $200m in forgone revenue, analysts estimate. CommInsure still holds major contracts with industry super schemes.