Australians referred to rehabilitation within six weeks of an injury or illness returned to work at a rate of 79%, but most are waiting nearly nine times that long for a referral, Swiss Re data shows.
The findings come from Rehabilitation Watch 2025, the fourth edition of Swiss Re's recurring analysis of rehabilitation outcomes in the Australian life insurance market. The report draws on program-level data from 12 rehabilitation providers working with 2,348 customers.
The median time to referral has fallen to 46 weeks, down from 59.5 weeks in 2022. Swiss Re says the improvement still leaves significant scope for earlier engagement.
Customers with mental health conditions fare worse. Their median referral time sits at 60 weeks, well above the overall figure. The delay has roots in the nature of the conditions themselves.
Research published in the Journal of Occupational Rehabilitation has found that mental health claims are harder to assess because injuries are invisible, medical opinions often conflict, and stigma discourages claimants from coming forward.
The Royal Australian and New Zealand College of Psychiatrists has separately warned that discrimination against mental health claimants compounds their conditions and delays access to rehabilitation.
The broader sector is grappling with the consequences. Figures released in 2024 by the Council of Australian Life Insurers showed mental health now accounts for nearly one-third of all TPD claims.
Insurers paid out more than $2.2 billion in retail mental health claims that year, nearly double the figure from five years earlier. Income protection claims linked to mental health reached $887 million. The rate of TPD claims for mental health among Australians in their 30s has risen more than 700% over the past decade.
The surge is not confined to Australia. The UK Health Foundation reported in 2024 that 8.7 million working-age Britons had a work-limiting health condition, up from 6.0 million in 2013, with the fastest growth among those citing mental health.
UK data offers a useful benchmark. Industry body GRiD found that 72% of absentees under group income protection policies returned to work in 2024, with insurers initiating more than 5,500 early interventions within six months. Half involved mental health. Australia's return-to-work rates are stronger when referrals happen early, but median referral times remain far longer.
Swiss Re's data shows rehabilitation programs delivered a 44% increase in day-to-day functioning, a 28% reduction in psychological distress, a 26% reduction in pain, and a 20% drop in fatigue. Some 42% of programs are now delivered digitally or via telehealth, expanding reach in regional and remote areas.
The reinsurer estimates a return of $26.89 for every $1 spent on external rehabilitation, based on actuarial modeling of reserve release.
Lloyd Campbell Gibson (pictured above), head of Life & Health Reinsurance for Australia and New Zealand at Swiss Re, said the industry is shifting from simply paying claims to partnering in recovery.
"When we get rehabilitation right, we deliver better outcomes for customers and strengthen the long-term resilience of our industry," he said.
