For the second time in 12 months, industry fund AustralianSuper has increased insurance premium rates for its members.
The new rates are effective from 29 March 2014, and apply to death, TPD and income protection cover. The increase in cover rates varies depending on the member’s age, choice of cover (units or fixed cover) and their occupation.
In a letter to its members AustralianSuper said the cost of insurance continued to rise in Australia, resulting in a need to increase rates. The fund linked the premium rise to the increased number of claims paid by insurers, driven by higher unemployment rates and growing consumer awareness of insurance. Changes to regulatory requirements and the amount of money that insurers needed to hold in reserve were also a factor, the fund said.
AustralianSuper also advised it would be reviewing its insurance rates annually, instead of every three years as is common in the Australian market. The fund said this may not necessarily result in annual premium increases, but would offer greater stability for members who may have previously experienced significant increases and/or decreases in their costs.
In June 2013, the super fund increased its rates by approximately 20-25% (see: Industry Funds Raise Insurance Premiums).
