Hidden insurance hikes are whittling away your retirement savings. Source: Supplied

The Daily Telegraph revealed that the surging costs, which now consume about 1 percentage point of the 9.5 per cent employer wage contribution to super, are whittling away workers’ retirement savings.

With premiums for death and disability insurance automatically deducted from super contributions, that would cost a young employee on average earnings around $40,000 in today’s dollars over their working life.

The Australian Prudential Regulation Authority found the increases are the result of insurers attempting to make up for losses incurred through dodgy underwriting practices.

“Insurers have lost quite a deal of money,” Geoff McRae of actuarial firm Rice Warner told The Daily Telegraph. “They’ve turned around and put premiums rates up — considerably.”

The biggest increase is by Qantas Super, which is jacking up automatic income protection cover for nearly 9000 employees by 312 per cent.