The private health insurance industry in Australia is wobbling. To some of its harshest critics, it is in a death spiral.

Here, Geoff Summerhayes — a board member of the Australian Prudential Regulation Authority (APRA), the independent government agency responsible for regulating insurers — warns such claims are no exaggeration, predicting that, without reform in the near future, some insurers face merger, while others will go to the wall.

His message is brutal: current premiums are too low to keep all insurers in business with the cost of the claims they face.

Back in 2018, I spoke of APRA’s growing concern about the risks posed to both the industry and its policyholders by the twin challenges of declining affordability and adverse selection.