AIIA NSW Financial Services Briefing: “Disruption in Insurance and Superannuation”

Insurance and Superannuation have long been viewed as relatively stable offerings within the financial services sector. Notwithstanding legislation changes, people paid their premiums and made super contributions on a regular basis and the monies were then invested for long term gains. Recently though the underlying assumptions and indeed the very business models of insurance and superannuation have shifted to the point where both industries will be forced to undertake significant change driven by a range of challenges that stem from • population demographics change where there are far fewer workers per retiree • elevated risks associated with an unfamiliar economic environment continue post GFC • heightened global tensions and cyber security influence the debate relating to how our data should be shared • the accelerated adoption of technology that disrupts current jobs via automation while (hopefully) creating new one, and • the overall increasing digitisation of the financial services we consume. The response of Government and the boards of our financial institutions to date has often lagged in response to these market forces. Many Australian Institutions now find themselves endangered from overseas competitors who have been early adopters and beneficiaries of digitisation and are now seeking to globalise their offerings. As an industry, we cannot wait to innovate. This now an imperative. The real question is how do we innovate to transform insurance and superannuation in a sustainable fashion to best leverage our current strengths in the sector to better fit rapidly changing customer needs.