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Speaking during the company's online 'Thrive for Life' presentation, Mu highlighted that economic volatility, regulatory changes, and affordability challenges are making existing life insurance models unsustainable. He noted that most households could afford only two mortgage repayments if they lost their income, while premiums and everyday expenses continue to rise, posing significant issues for both customers and advisers.
Mu pointed out that claims patterns have shifted over the past decade, with mental health claims doubling since 2014. Approximately 70% of claims in the current year have come from white-collar workers, indicating that mental health issues are pervasive across various demographics. Factors such as the COVID-19 pandemic, hybrid work environments, and digital disruption have contributed to this trend.
To address these challenges, AIA Australia is focusing on sustainable pricing and severity-based product design, moving away from comprehensive, high-cost total and permanent disability (TPD) cover. The company's TPD Assist model, which supports clients' gradual return to work, has delivered positive outcomes and will inform future product refinements.
Mu also urged advisers to reassess product selection through a long-term affordability lens, emphasizing that while comprehensive cover may appear attractive initially, sustainability is crucial for clients who need to maintain protection over time. He called for collaboration among industry stakeholders, regulators, and advisers to modernize best-interest duties and support the transition to more sustainable life insurance structures.
In summary, AIA Australia's call for structural reforms underscores the need for the life insurance industry to adapt to evolving challenges. By focusing on sustainable pricing, innovative product design, and collaborative efforts, the industry can better serve the needs of Australians seeking financial security in an increasingly complex landscape.
Published:Friday, 24th Apr 2026
Author: Paige Estritori
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