The amount of premiums group insurers charge have outweighed benefit payments by a whopping $21 billion over the last five years, Rainmaker analysis reveals.
Using APRA data of industry and retail superannuation funds and their respective life insurers, Rainmaker research found the gross five-year payout ratio for NFP funds was 51%, while retail funds recorded a 41% margin.
AMP Super topped the ladder, raking in $4.7 billion in premiums and paying 42% or nearly $1.95 billion in benefits.
Industry fund Rest, which recently appointed TAL as its group insurer after a 15-year relationship with AIA Australia, took in $3.4 billion worth of premiums and paid out $1.3 billion in benefits.
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BT Financial Group paid out about a third or $896 million of the $2.7 billion premiums it collected over the period, while MLC Super received $3.3 billion of premiums and paid out $1.5 billion.
Also backed by TAL, AustralianSuper generated $3.2 billion of premiums and paid 46% of this or $1.5 billion in benefits.
Of Commonwealth Bank's $1.9 billion premiums, $722 million was paid in benefits.
According to Rainmaker executive director of research Alex Dunnin, it's no surprise that insurers are fighting hard against the Protecting Your Superannuation (PYS) reforms for opt-in insurance for young people.
"Some of these millennials and Gen-Ys are getting slugged with fees of up to 30%."
Young members starting out in a casual job can have $500 in their super account, and slugged by 20% or $100 in fees, Dunnin said by way of example.
"Bumping the member fee to $150 or $200 - as a few industry funds are now doing - skyrockets the fees for these younger members into the stratosphere," he said.
"Given most of super's tax subsidies and benefits go to older, wealthier Australians, to expect young members to cross-subsidise them just rubs salt into the wounds."