UK insurers pay record £7.34 billion in protection claims in 2023 

Latest figures highlight the importance of protection insurance in providing financial stability during challenging life events. 

Insurers in the UK paid out a record-breaking £7.34 billion in protection claims during 2023, supporting individuals and families facing bereavement, illness, and injury.  

The figures, released by the Association of British Insurers (ABI) and Group Risk Development (GRiD), equate to approximately £20.1 million paid out per day. 

The bulk of the payments came from individual protection policies, which covered over 275,000 claims related to life insurance, income protection, and critical illness, totalling £4.85 billion. This marks a significant 5% rise in the number of individual claims paid, with a 14% increase in the overall value of payouts compared to 2022. 

Critical illness claims hit record high 

Critical illness claims alone reached a record £1.2 billion, a 13% (£136 million) increase from 2022. The number of claims also surged by 10%, with the average payout amounting to £67,267. Cancer remained the leading cause for these claims, accounting for £777 million in payments. 

Income protection claims rise in value despite fewer claims 

The total payout for individual income protection claims reached £177 million, reflecting a modest 2% increase from 2022, even though fewer claims were made. The average payout per claim rose to £9,425.  

Musculoskeletal issues, such as neck and back pain, were the leading causes for claims, but mental health claims accounted for the highest overall value at £37 million. 

Over 1,660 individual income protection claims have been in payment for more than 10 years, with 376 of these lasting over 20 years. 

High acceptance rate for claims 

Protection insurers continued to approve the majority of new claims, with 98.3% of individual claims being accepted in 2023. The average value of claims paid increased by 9%.  

Most declined claims resulted from policyholders failing to disclose pre-existing medical conditions or not meeting policy definitions. 

Insurance: A lifeline for individuals and families 

Yvonne Braun, director of policy, long term savings, health and protection at the ABI, emphasised the crucial role protection insurance plays in helping families through difficult times.  

“Every single day in 2023, the protection insurance industry paid out over £20 million to individuals and families affected by serious accidents, illnesses or even the deaths of loved ones,” she said. “The financial impact of these events can be devastating, adding even more stress to traumatic situations. These figures demonstrate that insurance plays a crucial role in supporting people financially when they need it most.” 

Breakdown of combined individual and group claims 

Data from ABI and GRiD highlights the breadth of support provided by different types of insurance products. Life insurance policies accounted for the largest payouts, with £3.92 billion across nearly 49,000 claims. Meanwhile, income protection claims totalled £810 million, with an average payout of £22,270. 

In total, insurers paid out on 297,561 individual and group claims, representing a combined acceptance rate of 97.4%. 

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Josie Miller Josie is an editor for Claims Media. She welcomes feedback, comments, and opinion at josie.miller@barkerbrooks.co.uk