New figures released by the Association of British Insurers (ABI) and Group Risk Development (GRiD) show that the insurance industry paid out more than £5.7 billion in protection claims in 2019 - a year on year increase of over £470 million on 2018 - with the percentage of claims paid rising to 98.3%. This is the highest percentage of claims paid on record.
The need for the financial safety nets and support services provided by protection insurance has become more important in recent weeks. Insurers have pledged to help customers, the NHS and companies who are likely to be making higher than usual claims in the future.
The data also shows that:
- £60.5 million was paid out in Individual Income Protection claims for mental health with an average claim of £15,728
- Over £3 billion in life insurance claims paid, up by over £19 million year on year
- Cancer is the biggest single reason for an individual critical illness claims with musculoskeletal the biggest reason for individual income protection, followed by mental health and then cancer
- Pay outs equal £15.8 million paid every single day, which is £1.3 million a day more than in 2018
- Non-disclosure was the biggest reason for declining a claim
The ABI’s Assistant Director, Head of Protection and Health, Roshani Hill said:
“The biggest ever pay out in protection insurance shows how vital this cover is for people who need support at a difficult time. The high number of claims paid should give people confidence they can trust that their insurance provider will be there when they need them, helping families get back on their feet and providing valuable safety nets when the worst happens.
“During uncertain times, when insurers are doing what they can to support individuals, families and the NHS, being able to have this confidence is more important than ever.”
Figures for the whole protection market (individual and group):***
| Products | Number of claims paid** | Percentage of new claims paid | Total value paid (000s)** | Average value of claims paid** |
| Critical Illness | 17,995 | 91.6% | £ 1,215,957 | £ 67,573.28 |
| Term Life | 39,638 | 97.4% | £ 3,073,382 | £ 77,535.28 |
| Total Permanent Disability | 474 | 71.7% | £ 32,345 | £ 68,174.01 |
| Whole of Life | 229,197 | 99.99% | £ 794,106 | £ 3,464.73 |
| Income Protection | 27,275* | 87.2% | £ 669,397 | £ 20,425.41 |
| All Protection Products | 314,580 | 98.3% | £ 5,785,187 |
*Includes figures from the Association of Financial Mutuals
**Figures are for new claims, as well as income protection claims in payment
***2019 saw a steep increase in the number of new claims paid, as well as some significant changes to average claim amounts. It should be noted that these changes are partly due to a reporting change, and comparisons of these figures to those reported in previous years should be made with caution
Products explained
- Critical Illness: A policy that pays out a lump sum, or ongoing payments, when the policyholder is diagnosed with a specified illness. Cancer is the most common cause of claim.
- Term Life Insurance: A policy that will cover the policyholder for a specified number of years, usually until retirement age. This policy pays a lump sum, commonly used to cover outstanding mortgage payments, if the policyholder dies unexpectedly or prematurely.
- Total Permanent Disability: This benefit pays a lump sum, or lifelong payments to the policyholder if they become permanently disabled.
- Whole of life Insurance: A product that covers the policyholder until the day they die. It allows the policyholder to build a small pot of savings to use to cover funeral costs, or to leave a small inheritance to family members.
- Income Protection: A policy designed to help fill income gaps when a person is unable to work due to illness or injury. It will usually cover a percentage of the policyholder's salary and will often provide support services to help employees back into work.
Notes to editors
Enquiries to:
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- The Association of British Insurers is the voice of the UK’s world leading insurance and long-term savings industry. A productive, inclusive and thriving sector, we are an industry that provides peace of mind to households and businesses across the UK and powers the growth of local and regional economies by enabling trade, risk taking, investment and innovation.
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