Super funds are being encouraged to rethink how they support members through insurance claims, as EML warns an even more complex claims environment is emerging across the superannuation sector.Launching a new white paper for the industry, The Complexity Premium; The cross-scheme pressures impacting claims in super, the specialist personal injury claims provider said the rise in mental health conditions nationally, combined with changes to workers compensation schemes, are likely to increase pressure on income protection and TPD cover inside super and place greater strain on funds’ claims capability in the years ahead.
The paper is intended to help funds better understand how claims patterns are shifting, what that means for members, and how they can adapt to a more demanding risk environment. It draws on research from Monash University and modelling from Melbourne University, supported by funding partners the Council of Australian Life Insurers.
Speaking to Super Review, EML Group Executive, Strategy & Growth, Dan Walton said the paper was developed in response to growing concern across the industry about the volume, cost and complexity of claims.
“I think everyone in the superannuation industry understands there is enormous pressure around claims, the growing number, and the heightened cost of claims,” Walton said.
“Our experience working in the industry has given us insight into the challenges facing both members and funds. The paper provides data led insights so the industry can see what is coming down the line in the years ahead”.
A central theme of the research is the growing prominence of mental health-related claims. Walton said mental health was now the single largest cause of TPD claims, accounting for almost one in three claims, while insurers paid nearly $2.2 billion in mental health-related claims in 2024 — almost double the amount recorded five years earlier. He said that trend was becoming increasingly pronounced among younger Australians, creating a longer-term challenge for funds and insurers alike.
“We also know that claims, particularly for the younger generation, are continuing to increase exponentially,” Walton continues.
“We think it’s an important point in time to have real conversations about the data and challenges we are seeing and provide expert-led guidance for the industry moving forward.”
The white paper also points to a potentially sharp increase in claims flowing into superannuation.
According to EML’s paper, the research highlights a projected 732 per cent increase in TPD claims among people in their 30s, alongside a 19 per cent increase in income protection claim lodgements in superannuation over the next 10 years. These figures have been modelled on Victoria, but Walton said it suggests that if changes were replicated across other states and territories, this figure could increase exponentially.
Walton adds these figures reflected the growing interconnectedness of Australia’s broader income support system, where changes to one scheme can create direct consequences in another.
“As a result, members are turning to their superannuation fund to make a claim.” That flow-on effect is central to EML’s argument, as more members may seek income support through superannuation and life insurance arrangements, shifting pressure further down the claims chain.
With New South Wales progressing reforms and Queensland reviewing its own settings, he said the sector could be facing the early stages of a broader structural shift.
According to Walton, that is why superannuation, income protection and workers compensation need to be viewed less as standalone systems and more as interconnected parts of a broader income support framework. “We know that other states are following suit,” Walton said.
Australia has 11 major income support systems, he noted, with expenditure across that ecosystem rising by about 73 per cent in just under a decade.
Yet despite the overlap between schemes, members can still experience very different experiences and outcomes depending on where they enter the system.
“What we know is this isn’t a standardised framework so it’s crucial to understand how income protection in super and workers compensation can heavily intersect and overlap. They’re all part of that broader income support ecosystem,” Walton said.
“The reality is that the same person with the same needs can experience markedly different treatment outcomes depending on which scheme they enter, and the boundaries between these schemes become predictable pressure points for delay, duplication and obviously decline where that takes effect.”
Claims management
The implications for funds are likely to be felt first in claims operations.
EML’s paper notes that likely pressure points include increased claims activity in group income protection, greater scrutiny of policy definitions, offsets and waiting periods, stronger focus on member understanding of cover, and added pressure on claims management, pricing and sustainability settings.
Walton said claims management was already the area most exposed, particularly as mental health claims become more frequent, longer in duration and more difficult to resolve under traditional operating models.
“Claims management is undoubtedly becoming the biggest pressure point for funds,” he said. “But what we know is that because of the increasing complexity of claims, particularly mental health claims, the traditional approach of treating claims management as an admin cost to be minimised, is unsustainable.”
Rather than focusing solely on administrative efficiency, Walton said funds should be thinking more broadly about specialist capability, early intervention and member support at the point of vulnerability.
“Capacity alone, simply having enough people to process claims is important, but that’s one part given the complexity of claims is fundamentally changing,” he said. “Mental health claims require specialist capability, trauma informed communication and coordinated support across multiple providers.”
That is where EML and its specialist approach to claims management can help . The group says it manages around 90,000 claims each year across Australia, giving it exposure to a broad range of claim types and demonstratable experience in complex claims environments nationally.
EML argues that this scale provides deeper operational learning across eligibility, decision-making and compliance, and enables it to support funds facing rising claims pressure.
Walton said that experience had reinforced the value of early intervention as one of the strongest levers available to improve outcomes for members and reduce friction in the claims process.
“For us, managing 90,000 claims across multiple product lines speaks to an unparalleled capability and provides critical insights into the various income support systems nationally,” Walton said. “This scale and experience have allowed us to invest heavily in what works, which is early intervention.”
He pointed to an independent evaluation by Taylor Fry, which found participants in one of EML’s intervention programs were 247 per cent more likely to return to work within six months than non-participants.
Walton added that it demonstrates how earlier, more structured support can improve recovery outcomes while also strengthening the overall claims experience for members.
Looking ahead, Walton said funds should review whether they have the right specialist capability to manage more complex mental health claims, move away from pure cost-compression models in claims management, invest in recovery-oriented and trauma-informed teams, and improve the handover between schemes so members do not fall into avoidable gaps.
He also argued that funds should think more broadly about how they measure success in claims management.
“Ultimately, if you look at it, success needs to be measured by recovery and return to work, not just by claim closure rates,” Walton said.
Disclaimer:
The EML Group is made up of a group of companies owned and operated by a partnership between Employers Mutual Limited ABN 67 000 006 486 and ASWIG Management Pty Limited ABN 52 002 617 012. All references to data and statistics referred to in this article are found within The Complexity Premium; The cross-scheme pressures impacting claims in super White Paper.
