Appointed Head of Insurance in 2014, AustralianSuper’s Richard Weatherhead faced the dual challenge of improving both the value and sustainability of the fund’s insurance offering – and all in an environment of ballooning premiums across the industry which were impacting on members’ perceptions of value.

“As insurance costs rose we faced the harsh reality that some members simply couldn’t see the value of insurance for them personally”, recalls Richard.

“We really needed a solution that would deliver extra value and security to members within a more commercially viable package.”

Tackling the challenge with his customary high energy and commitment, Richard and his team negotiated a new long-term arrangement with insurer TAL that’s big on value, and security.

“With so many insured members, we can negotiate much cheaper arrangements and prices will be more stable than in the past because the new contract with our insurer is for longer than the two or three years that group insurance agreements have traditionally lasted. And our insurance offer is reviewed annually to help ensure that the cost and amount of cover provided to members is the best possible value, now and in the future.”

On keeping it real

Acknowledged by his peers as an industry guru, Richard’s role at Australia’s largest industry super fund follows a string of high profile positions in the UK and more recently at Rice Warner and AMP in Australia. Yet Richard recalls in his early days, like most of us, being unsure about what direction to take.

“When I left school, I didn’t have a clue what I wanted to do. Maths was the thing I was best at, so I was advised to do a maths degree because it would stand me in good stead to do anything.”

“I did holiday work with insurance companies, including some on retirement-related insurance products, and that really whetted my appetite.”

Richard followed up some years in insurance with a stint consulting in the financial advice industry, which took him back to the coalface. “You get a lot of insight into what we’re all here for: real customers; real people. It was a great education in where our priorities should lie”, he says.

On what matters with insurance

At AustralianSuper, Richard says he’s found it easier to focus on the right priorities. He’s clear on what he sees as the differentiators between insurance through AustralianSuper and a retail insurance offering.

“In the retail environment there was an enormous focus on sales and the interests of financial advisors. Here, it’s the members that count”, he says, noting, “You see a lot of ads for ‘direct insurance’ on the retail side, but AustralianSuper really has the ultimate direct insurance model. Instead of putting most of our energy into sales, it all goes into service”.

He’s also keen to highlight the value of the default insurance cover members receive through funds like AustralianSuper.

“The primary thing I always come back to is that every new member joining through their employer gets cover automatically, paying out at least on death and usually on disability, with no health checks – that’s simply not the case with private insurance.

“As a private individual, you have to put in an application for life insurance and have your health assessed, and you may or may not be accepted. But every year we have about 200,000 new members joining through their employer and they’re all offered full cover, no questions asked, and that’s a real positive”.

If members do need to make a claim, it’s equally important they get value from the insurance they invested in’. And for Richard, that perception of value hinges on the quality of the claim process.

“It’s when a claim comes in that the rubber hits the road”, adding, “We have a team of 140 people who are all there to make sure our members get the right payout and outcome.”

On his core values

At AustralianSuper, Richard’s role speaks to strong personal values around the importance of economic empowerment and making a difference to lives.

“Working at AustralianSuper has really rekindled my original passion for using financial products to improve people’s lives”.

“Economic empowerment is an important part of the work we do for our members every day and in the context of insurance, it means making sure insurance premiums are sustainable; where members have the right cover, without depleting their retirement balances.”

Negotiating a better deal for members is an aspect of the job Richard particularly enjoys and .in doing so he feels in sync with his colleagues.

“Knowing that I’m working for 1.3 million people and doing a small amount to safeguard their future is a great feeling,” he says, adding: “At AustralianSuper, the ‘members first’ mantra isn’t just a platitude – it’s absolutely alive and kicking”.