REST Industry Super has boosted the rate at which it receives the medical forms for a group insurance claim, completed on the first attempt, from 57 per cent to 87 per cent.
The fund achieved the result by working with its group insurer, AIA Australia, and re-insurer Swiss Re, to apply behavioural economics to a redesign of its process for gathering information from medical practitioners.
Swiss Re claims rehabilitation specialist Nick Mingo spoke about the initiative at the 2017 Group Insurance Summit, held in Sydney on August 29, and encouraged other funds to consider how they might apply insights from behavioural economics to improve their own claims processes.
More user-friendly documents get better responses, not only from members, but from all the various stakeholders in the claims process, including doctors and lawyers, Mingo said.
Prior to the redesign, REST’s claim form required its members to ask their general practitioner (GP) to provide an opinion on their “functional capability”. This section of the form was returned completed correctly only 57 per cent of the time. Then came the changes.
“We made the forms more salient, more relevant, and also redesigned them so it was more obvious when they were not filled out,” Mingo explained. “We also asked [the GPs] to use everyday examples, such as, could a patient lift a washing basket or shopping bags. Using these everyday life examples made it more relevant.”
As a result of these changes, the response rate by GPs increased and the proportion of completed forms shifted to 87 per cent, Mingo said.
Swiss Re, which set up a behavioural research centre four years ago and has completed 100 trials over 30 countries and 5 million policyholders, is now designing a test for a similar case study with AIA Australia.
Knowing vs doing
Mingo said there were a number of lessons from behavioural economics relevant to the group insurance sector, such as insights into how people avoid complex and difficult decisions.
“[People] prefer no decision to making the wrong decision,” he said. “Knowing what you should do is also very different to acting on it – that’s a key to behavioural economics. For example, if you have to print out a form, and then fill it in and post it, people may give up. Think about making some of the action points more intuitive. Opt-out is also very powerful.”
Another danger with default cover, he said, is that members may wrongly see it as a personal recommendation made for them. This could lead them to reject other levels of cover or not actively engage with insurance.
“Insurers should think about communicating that default cover is a minimum; that’s one way of dealing with this,” Mingo said.
Because the benefits are potentially far into the future, which promotes procrastination, he encouraged bringing consideration of the future premiums and benefits into the present.
“Encourage choosing outcomes versus choosing products, and help them bring their future self to the present self,” he said.
Mingo also encouraged insurers to look at the language they use in their communications.
“Using language people can relate to changes the outcome,” he said. “Small, quick and relatively inexpensive change can have a big effect on behaviour. Applying behavioural economics can improve the member experience.”
The 2017 Conexus Financial Group Insurance Summit was produced with thanks to support from platinum sponsors AIA Australia and TAL Australia, and silver sponsor Swiss Re.