Swiss Re Suspends New Life Insurance Operations in Australia
Swiss Re Suspends New Life Insurance Operations in Australia
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Swiss Re Life & Health Australia has announced a suspension of new life insurance business activities in the country, effective October 2025.
This decision stems from concerns over the sustainability of Total Permanent Disability (TPD) insurance products, which have seen a significant rise in claims, particularly those related to mental health.
According to the Council of Australian Life Insurers, insurers paid more than AU$2.2 billion in mental health-related TPD claims in 2024, nearly double the amount five years earlier. This surge has placed considerable strain on the financial system and raised questions about the long-term viability of current TPD insurance models.
Paul Murray, CEO of Life & Health Reinsurance at Swiss Re, stated that the pause aims to support industry renewal and balance consumer protection with economic sustainability. He emphasised the need to preserve the social value of TPD insurance while creating a model that can endure economic cycles and demographic shifts.
During this period, Swiss Re will not take on new life insurance clients in Australia until the market demonstrates a shift toward more sustainable product designs. Instead, the company plans to collaborate with existing retail clients, regulators, and industry groups to redesign products that better reflect changing societal needs.
This move underscores the importance of addressing the challenges posed by rising mental health claims and the necessity for the life insurance industry to adapt its products to ensure both consumer protection and financial sustainability.
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Knowledgebase
Term Life Insurance: A life insurance that provides a cover for a specific period of time - usually one to five years or until the insured reaches age 65 or 70.
