A recent KPMG report has unveiled a concerning trend in Australia’s insurance landscape. Over the past decade, there has been a staggering 732% increase in total and permanent disability (TPD) claims for mental health within the 30 to 40 age group. This spike is the most prominent among all demographics and signals a growing crisis.
The report, “Australia’s Mental Health Check Up” commissioned by the Council of Australian Life Insurers (CALI), shows that a significant number of Australians, especially those in their 30s, are leaving the workforce permanently due to mental health issues. The average age of individuals making such exits has declined from 49 to 46 years, while the average age for physical disability claims has stayed at 49. Notably, men are 60% more likely than women to file claims related to mental health conditions. Mental health now accounts for nearly 80% of the overall rise in permanent disability claims in the past decade, with an average annual growth rate of 10%, in stark contrast to the 0.5% growth rate for physical disability claims.
Life insurers, which play a crucial role in providing financial support, have raised concerns that the escalating mental health claims could threaten the affordability and sustainability of life insurance. KPMG Partner Briallen Cummings has emphasized the gravity of the situation, highlighting the increase in both the quantity and severity of mental health conditions as reflected in the life insurance data. CALI CEO Christine Cupitt has called for a more comprehensive approach, stating that while the government is addressing mental health, the community needs a stronger and earlier safety net to prevent individuals from being left unsupported.
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