The Cost of Waiting

Australia is having an important and overdue conversation about mental health, the scale of the challenge, the adequacy of the response and the role of both government and the private sector in meeting it.

Australian life insurers exist to provide financial protection when customers can't work due to illness or injury, and occupational rehabilitation is a core part of how they support recovery. Funded by insurers and provided to customers on claim at no additional cost, these structured programs are delivered by qualified allied health professionals to help people rebuild their functioning, wellbeing and capacity to return to work. Life insurers are not able to fund medical treatment , so occupational rehabilitation represents one investment they can make in their customers' recovery. 

Access to industry-wide data, which shows where these programs are delivering and where they are falling short is critical for future improvement. Swiss Re's Rehabilitation Watch 2025 is the first analysis of program-level occupational rehabilitation data aggregated across the Australian life insurance market, covering 2,348 customers across 12 rehabilitation service providers and 11 distinct program types.

The report findings from Rehabilitation Watch 2025 are encouraging in some respects and confronting in others, particularly when it comes to mental health.

Mental health conditions represent a significant and growing share of life insurance claims in Australia, and yet the report found customers with a mental health condition represented only 18% of all people who accessed occupational rehabilitation, a meaningful underrepresentation given claim volumes. For a large proportion of people with mental health conditions on claim, structured recovery support is simply not reaching them.

For those who do access support, the report findings show that timing compounds the problem. Customers with a mental health condition wait a median of 60 weeks from the onset of disability before being referred to occupational rehabilitation. This is more than a year, and 22 weeks longer than customers with musculoskeletal conditions. 

The data makes clear why this is important: Across every program type measured, occupational rehabilitation reduces psychological distress, with mental wellbeing support programs delivering a 47% reduction and exercise programs, widely used for mental health customers, delivering a 17% reduction alongside meaningful improvements in fatigue and daily functioning. The report findings indicate that waiting for distress to resolve before offering support that can measurably reduce distress is the wrong sequencing, and may delay recovery rather than supporting it. For insurers, mental health rehabilitation delivers the highest return on investment compared to customers with cancer, a musculoskeletal or other condition in the Rehabilitation Watch data, with every dollar spent on external rehabilitation services returning an average of $33.61. The current underutilisation presents a clear opportunity to improve outcomes on both clinical and financial measures. 

There is also a question of program fit. Only a small proportion of mental health customers accessed programs specifically designed to address mental wellbeing, despite the reporting finding these delivered the greatest reductions in psychological distress of any intervention measured. The right programs exist within the life insurance system but are not being deployed consistently enough, or early enough, for the people who would benefit most from them. Digital and hybrid delivery, now accounting for 42% of programs, has helped extend reach, particularly for people in regional and remote areas, but the strongest predictor of good outcomes in the data was not technology or mode of delivery. It was how early support was offered and the quality of the relationship between the customer and the professionals supporting them. 

The infrastructure exists, the programs are effective and the data now shows where the gap lies. For Swiss Re, and for the broader life insurance industry, closing that gap, by referring more people with mental health conditions into rehabilitation earlier and more consistently, represents a clear opportunity to improve outcomes at scale.