Why is HESTA lowering its insurance fees while other super funds are raising theirs?

HESTA is reducing insurance premiums by an average of 12% because its partnership with insurer AIA Australia has allowed for better cost management. In contrast, rivals like AustralianSuper and Cbus, who use TAL as their insurer, are facing higher underlying costs.

How much will insurance costs drop for HESTA members?

HESTA members will see an average reduction of 12% in their insurance fees. This move is intended to provide financial relief to members facing high cost-of-living pressures and economic volatility.

Which insurance providers are behind the price changes at AustralianSuper, Cbus, and HESTA?

HESTA utilizes AIA Australia for its group insurance needs, a partnership that has enabled this recent price reduction. AustralianSuper and Cbus have their group insurance provided by TAL, which is currently passing on higher costs to those funds' members.

Is the broader life insurance market becoming more expensive?

Yes, the broader life insurance landscape is under significant strain, with most providers facing upward price pressure. Data from the Council of Life Insurers of Australia shows that insurance claim volumes doubled in the two years leading into 2024.

Why are insurance claims increasing across the superannuation industry?

The surge in insurance costs is primarily driven by an "explosion" in mental health claims and Total and Permanent Disability (TPD) claims. These types of claims are more frequent and often more complex to assess, putting pressure on the bottom lines of major insurers.

What does HESTA’s fee reduction mean for its competitive position against AustralianSuper?

The 12% fee cut enhances HESTA’s appeal to fee-conscious retail investors and younger members who prioritize low overheads. By lowering costs while AustralianSuper and Cbus implement double-digit hikes, HESTA is positioning itself as a more affordable "defensive" choice for insurance within super.

HESTA slashes insurance fees despite industry price hikes

Written by Heidi Cuthbert Published May. 7 2026Last Updated May. 7 2026

HESTA announced a substantial reduction in insurance fees, directly countering a wave of price increases across the broader market.

While major competitors including AustralianSuper and Cbus prepare to hit members with double-digit premium hikes, HESTA has confirmed that its members will benefit from an average price drop of 12%.

The divergence in pricing strategy highlights the differing pressures on group insurance providers.

While AustralianSuper and Cbus currently partner with TAL—which has faced rising costs—HESTA maintains a long-standing arrangement with AIA Australia.

The reduction arrives as a welcome reprieve for the fund's member base, many of whom are grappling with persistent economic volatility and cost-of-living concerns.

Outgoing CEO Debby Blakey emphasised that the decision aligns with the fund’s core mission to provide "affordable and accessible" cover.

"Being able to keep insurance costs down and enhance protections is a fantastic outcome for our members," Blakey stated, noting that the enhanced value comes at a critical time for household budgets.

The broader life insurance landscape remains under immense strain, driven primarily by a surge in mental health and total and permanent disability claims.

Data from the Council of Life Insurers of Australia indicates that claim volumes doubled in the two years leading into 2024.