Swiss Re Life & Health Australia is to pause new business activities in Australia with immediate effect, stating it will not add new insurers to its life insurance segment “until the market demonstrates a clear shift to sustainable product design”.
In a statement Swiss Re says the changing nature of work, rising claims costs, and evolving societal expectations have created discussion around the long-term sustainability of TPD insurance in Australia.
See: Swiss Re Clarifies Statement on Pausing New Clients
Citing data published by CALI last year, the firm states insurers paid out more than $2.2bn in mental health-related TPD claims – “nearly double the amount from five years earlier”.
Paul Murray, CEO Life & Health Reinsurance at Swiss Re, said: “The shared goal across the industry is to preserve the social value of TPD – protecting Australians when they need it most – while creating a model that can endure economic cycles and demographic shifts.
“This means balancing protection with long-term sustainability to avoid increased premiums, which can contribute to making insurance unaffordable.”
…this decision is necessary to safeguard our portfolio and to advocate for reform regarding product design…
Swiss Re states it will not seek to add new insurers in the life insurance segment until the market demonstrates a clear shift to sustainable product design.
Instead, the company will work with its existing retail clients and the industry, including regulators, to redesign products that respond to changing societal needs and give consumers more certainty as they plan for their future.
Lloyd Campbell Gibson, Head Life & Health Reinsurance Australia & New Zealand at Swiss Re, said: “Our dedication to the Australia and New Zealand markets remains unwavering, and this decision is necessary to safeguard our portfolio and to advocate for reform regarding product design.
“As an industry, we must transition from the sole focus of claims payment to partnering on an individual’s health journey. Through evidence-based changes, TPD can become a more adaptive and accessible form of protection for future generations.”
He says engagement with the New Zealand retail life insurance market will continue to focus on ensuring the protection of New Zealanders and proactively managing the long-term sustainability of disability products.
The company has not stated which companies are affected by its decision, “…we cannot comment on specific clients”.
