Old settings for TPD 'no longer fit': APRA

APRA executive director of superannuation, life and private health insurance Jane Magill said total and permanent disability insurance (TPD) in its current form is being tested by the sharp rise in mental health claims.

Speaking at the All Actuaries Summit 2026, Magill called this a structural shift with TPD being asked to solve an issue it was never built to address.

CALI data showed mental health claims now account for one in three claims paid and these claims for people in their 30s have risen by more than 700% over the past decade.

"These are adaptive problems: moments when the world has changed, where the old settings no longer fit, and there is no textbook solution waiting on the shelf," she said.

"Progress now requires more than technical skill. It calls for a change in perspective, creativity, agility and coordination across disciplines."

She added APRA does not intend to intervene at the current stage by prescribing product definitions or applying capital adjustments.

"This is a more complex challenge and does not have a single, straightforward solution," Magill said.

However, she said APRA will continue to diagnose the issues through thematic reviews, bring all relevant parties to the table and engage in discussions with government and other agencies on where there may be constraints and where change may be needed.

APRA is working closely with CALI to facilitate engagement between insurers and trustees to address sustainability, she added.

At a recent roundtable with ASIC, Magill said several themes were consistently raised on the case for earlier intervention in a person's disability journey, to provide support sooner and improve long-term outcomes.

APRA also found the label of TPD, and lump sum benefits do not always deliver good outcomes for individuals, particularly for claimants with episodic conditions.

"APRA recognises that there are genuine constraints around product design. The industry has highlighted legislative restrictions where APRA does not hold the levers. We cannot change those settings, but we can help facilitate dialogue with government where needed," she said.

"We also recognise that change toward sustainable product design does not happen in isolation. It requires support from distribution partners."

She added in a challenge like this, actuaries play a critical role in identifying pressure points and building sustainable solutions.

"You are the voice of risk within your organisation, and you can often see these pressures building before they become obvious in reported results," she said.

"Across product design, pricing and reserving, you bring a clear view of both the liability side of the balance sheet and the interests of policyholders. That puts you in a distinct position to balance commercial objectives with community interest."