Australians are living longer but spending more of their later years managing chronic illness, according to research from life insurer Zurich.

The Zurich Chronic Care Index ranks Australia eighth among the 38 Organisation for Economic Co-operation and Development countries for overall health system performance, reflecting low mortality rates and strong healthcare capacity.

It outperforms New Zealand, Japan, Sweden, Canada, the US and Britain in the overall rankings.

But Australia ranks considerably lower on morbidity, with increasing numbers of people living with long-term illnesses, requiring high levels of care.

The index compares mortality and morbidity across more than 200 chronic conditions, including cardiovascular disease, cancer and neurological disorders.

It identifies a “widening gap between lifespans and health spans”.

“This means more pressure on health systems and households and a growing need for ongoing support,” Zurich said.

“It also shifts the challenge from short-term events to long-duration risk – with direct implications for prevention approaches and care costs.”

Zurich Australia head of retail Tim Kane said: “People are living longer than ever before, but often with long-term illnesses that significantly impact how they live and work, as well as their financial security.”

The index shows mental disorders are Australia’s largest contributor to chronic illness, affecting almost one in three people, followed by musculoskeletal conditions and neurological disorders.

Zurich says the three categories accounted for almost 60% of its claims last year.

Cancer remains the largest contributor to mortality in Australia, accounting for about two in five deaths, followed by cardiovascular disease at about one-quarter and neurological disorders at about one in 10.

Mr Kane said: “This research provides a valuable benchmark to identify strengths, gaps and potential future strains on Australia’s health system.

“In turn, insurers and other critical parts of the health ecosystem can develop more meaningful and targeted prevention and early intervention programs focused on improving people’s health, productivity and financial resilience.”