AustralianSuper chief executive Ian Silk has predicted a decline in the important of insurance in superannuation, including its ousting as a default portion of the system.
Appearing as part of a panel discussion about the future of super at the ASFA Conference in Melbourne, Silk promoted his belief that insurance premiums were increasing across the industry as more Australians claim on their cover and less of those claims get denied.
Silk said there had to be another way, because premiums could not continue to increase without detracting excessively from retirement savings.
"In 10 years' time I would say it [insurance] possibly would be removed as being a default part of the system, but likely to have a less important role to play in the superannuation industry," Silk said.
The AustralianSuper boss said the issues of insurance in super were a problem of the industry's making, noting the super and insurance sectors put themselves in the firing line without government or regulatory intervention.
"We're in this situation where an objective critique would say, I think, the interaction of insurance in the superannuation industry is not working as well as it might," Silk said.
"And so there have already been some legislative changes that have been introduced by the government to address that. In our own case we researched young people and found most of them, the overwhelming majority of them, did not want insurance. So we changed the default arrangements."
Silk, Mercer head of industry and public sector super Jo-Anne Bloch and IPAC Securities co-founder Peeyush Gupta discussed several issues facing the super system.