AIA Australia Highlights Structural Shifts in Life Insurance Industry
AIA Australia Highlights Structural Shifts in Life Insurance Industry
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AIA Australia CEO Damien Mu has cautioned that the life and health insurance industries are facing structural changes driven by mounting mental health claims, rising premiums, and ongoing cost-of-living pressures.
Speaking during the company's online Thrive for Life presentation, Mu highlighted that economic volatility, regulatory changes, and affordability challenges are rendering current life insurance models unsustainable.
Mu noted that most households could afford only two mortgage repayments if they lost their income, while premiums, schooling costs, and everyday expenses continue to rise. He also pointed out that claims patterns have shifted over the past decade, with mental health claims doubling since 2014. Approximately 70% of claims this year have come from white-collar workers, indicating that mental health issues are impacting a broad demographic.
To restore affordability and ensure product longevity, AIA Australia is focusing on sustainable pricing and severity-based product design rather than comprehensive, high-cost Total Permanent Disability (TPD) cover. The insurer's TPD Assist model, which supports clients' gradual return to work, has delivered strong outcomes and will inform future product refinements.
Mu urged advisers to reassess product selection through a long-term affordability lens, emphasising that comprehensive cover might look attractive upfront, but sustainability matters more to clients who need to maintain protection over time. He also called for industry, regulators, and advisers to collaborate in modernising best-interest duties and supporting the transition to more sustainable life insurance structures.
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. - read more
AIA Australia CEO Damien Mu has cautioned that the life and health insurance industries are facing structural changes driven by mounting mental health claims, rising premiums, and ongoing cost-of-living pressures. Speaking during the company's online Thrive for Life presentation, Mu highlighted that economic volatility, regulatory changes, and affordability challenges are rendering current life insurance models unsustainable. - read more
The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have released an update on the progress life insurers have made in addressing issues related to premium increases, product design, and disclosure and marketing materials. This follows previous notifications amid growing concerns that frequent, large, and unexpected premium increases may not have been applied in accordance with policy terms and may not have met reasonable policyholder expectations. - read more
In a significant development for the Australian life insurance industry, the Parliament has passed the Treasury Laws Amendment (Genetic Testing Protections in Life Insurance and Other Measures) Act 2025. This legislation, enacted on 1 April 2026, prohibits insurers from using genetic test results to influence underwriting decisions for life, income protection, or trauma insurance policies. The ban is set to take effect on 8 October 2026. - read more
The Australian life insurance industry is witnessing a significant increase in mental health-related claims, with recent data indicating that these claims now account for nearly one-third of all total and permanent disability (TPD) claims paid. This trend underscores the growing impact of mental health issues on the workforce and the broader community. - read more
AIA Australia CEO Damien Mu has raised concerns about the sustainability of the current life insurance model, citing rising mental health claims, increasing premiums, and ongoing cost-of-living pressures as key factors necessitating structural changes within the industry. - read more
Farming is a vital part of New Zealand's economy and cultural heritage, representing a way of life for thousands across the country. With its unique landscapes and diverse climate, New Zealand farmers are renowned for producing a wide array of high-quality products that serve not only the nation's needs but also supply a multitude of international markets. - read more
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In the heart of New Zealand's pastoral verdure, the significance of preparedness for natural disasters is paramount for the farming industry. The distinct landscape, while providing an idyllic backdrop for agricultural pursuits, is not without its challenges. Farmers are often at the mercy of nature's unpredictability, making disaster preparedness not just prudent but essential for the continuity of their livelihood. - read more
Those who work the land know that every farm has its own heartbeat - its unique rhythm defined by the crops it yields, the livestock it nurtures, and the natural environment it exists within. Recognizing this individuality is crucial, especially when it comes to safeguarding your agricultural investment with the right insurance policy. - read more
Farming is a vital part of New Zealand's economy and cultural heritage, representing a way of life for thousands across the country. With its unique landscapes and diverse climate, New Zealand farmers are renowned for producing a wide array of high-quality products that serve not only the nation's needs but also supply a multitude of international markets. - read more
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Knowledgebase
Replacement Cost: The amount it would cost to replace or rebuild an insured asset with one of similar kind and quality, without depreciation.
