Swiss Re Life & Health Australia Limited will pause new business activities in Australia from October 2025. The reinsurer said the pause was due to a need for sustainable product design reforms in the country’s life insurance market, particularly in total permanent disability (TPD) insurance.
The company announced the decision Thursday, stating it will not seek new clients in the life insurance segment until the market demonstrates a clear shift towards sustainable product design. Swiss Re said it will continue working with existing retail clients during the pause.
The move comes as rising claims costs and changing societal expectations have fuelled discussion about the long-term viability of TPD insurance. The Council of Australian Life Insurers reported that insurers paid out more than $2.2 billion in mental health-related TPD claims in 2024 – nearly double the amount recorded five years earlier.
“The current dialogue represents a chance for renewal,” said Paul Murray, CEO of life and health reinsurance at Swiss Re. “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.”
The changing nature of work has added pressure to the TPD system, placing strain on Australia’s financial framework, the company noted.
Swiss Re said it will work with existing retail clients, the broader industry, and regulators to redesign products that reflect evolving societal needs and provide consumers with greater certainty for future planning.
“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,” said Lloyd Campbell Gibson, head of life and health reinsurance Australia & New Zealand at Swiss Re. “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.”
The company noted its engagement with New Zealand’s retail life insurance market will continue.
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