A seismic pause in Australia’s insurance system

Swiss Re Life & Health Australia Limited, the Australian arm of one of the world’s largest reinsurers has announced it will pause writing new life insurance business in Australia from October 2025.¹

This is not a routine commercial adjustment. It is a warning from the top of the risk chain:

When a global reinsurer steps back, the whole sector must reckon with why.

Why Swiss Re’s move matters

Swiss Re is a reinsurer, the company that provides insurance for insurers, absorbing part of their financial risk so they can operate securely at scale.² Reinsurers see the full market across decades, demographics and claims patterns.

When they lose confidence…the entire structure shows its cracks.

Swiss Re’s focus is Total & Permanent Disability (TPD) insurance, a product overwhelmed by psychological injury and adversarial claims hurdles.

It confirms what injured people have been saying for years: insurance systems are hurting people instead of helping them.

How did we get here?

TPD products scaled rapidly in the early 1990s through compulsory superannuation.³ They were built for a world where:

• workers stayed in one job for life

• injuries were mostly physical

• male breadwinners were the assumed claimant

That world is gone. Yet the definition of disability remains stuck in 1992:

That binary, fit or never fit becomes cruelty when applied to trauma, depression, burnout and PTSD.

A rising wave of psychological injury

Mental-health-related TPD payouts in Australia exceeded A$2.2 billion in 2024, almost double what they were five years earlier.⁴

Executives call this “unsustainable.”What they mean is:the cost of harm is rising faster than their models can handle.

Their response? More barriers.More disbelief. More damage.

The compassion deficit in product design

Insurance was designed to manage liability, not to nurture recovery.

• Every reassessment

• Every forced retelling

• Every contradictory medical opinion

…becomes secondary trauma. Systems cause moral trauma, not relief.

Swiss Re’s pause is a rare admission:

Historical bias + artificial intelligence = automated discrimination

Insurers are now turning to AI for triage and pricing. But historical data carries:

• gender inequity

• stigma toward mental health

• penalties for part-time & disrupted work lives

Feed this into algorithms → bias laundering⁵The future becomes a machine-scaled version of past injustice.

Old architecture + new technology = amplified harm.

And women are hit the hardest

Women:

• earn less and retire with ~35% less super on average⁶

• are more likely to work part-time

• are more exposed to psychological injury and harassment

• carry more unpaid care roles

The result?A system built on male permanence becomes a system of female vulnerability.

Why workers’ compensation is the next critical fault line

Here’s the truth that ties this all together:

Swiss Re does not reinsure workers’ compensation in NSW. But workers’ comp uses the same design logic that has already failed in TPD:

• suspicion before support

• delayed treatment

• denial through definition

• repeated psychological re-exposure

• adversarial “prove you are broken” processes

Regulators have warned insurers and scheme agents to improve claims handling across product lines.⁷

So even though the money flows differently, the harm flows the same.

Workers’ comp has become the mirror that shows the whole industry’s moral collapse.

Can profit and compassion coexist?

They can if we redefine success.

We must reward:

• trauma-informed practice

• early stabilisation

• genuine recovery outcomes

• claimant-reported dignity

Financial sustainability without psychological sustainability is moral insolvency.

What Swiss Re’s pause really signals

A global reinsurer has said the quiet part out loud:

It is a structural collapse in slow motion —and a once-in-a-generation chance to rebuild protection as care, not control.

About Shattered

Shattered is explores the historical origins of harm in our workers’ recovery systems — and the modern machinery that sustains it. It has taken over 12 months of extensive research and speakig with experts and lived experience around the country.

We must all be united in refusing reforms that tinker around the edges. We must design for human life, for people, not balance sheets.

Because healthy individuals build healthy societies and in a time of intense global pressure, nothing is more important.

Systemic reform begins with human restoration. We must work towards rebuilding the moral architecture that holds communities together.

Footnotes

1. Swiss Re advisory — Australian business pause (2025): swissre.com/australia_newzealand/...

2. Swiss Re global — role as reinsurer: swissre.com/about-us.html

3. Compulsory super & TPD origins: swissre.com/australia_newzealand/insights/tpd-product-needs...

4. A$2.2B mental injury TPD payouts — near doubling in 5 yrs: ifa.com.au/...

5. ASIC on AI discrimination + claims handling: asic.gov.au/...

6. Gender super gap — WGEA: wgea.gov.au/...

7. ASIC letter to improve claims management: asic.gov.au/...