A record £8 billion was paid out by insurers in 2024 to support policyholders facing bereavement, serious illness, or injury, according to new figures released today by the Association of British Insurers (ABI) and Group Risk Development (GRiD). The total, which includes group and individual protection claims, represents a significant increase on previous years and equates to an average of £21.9 million in claims paid every day.
The figures underline the critical role of protection insurance in providing financial stability during periods of personal crisis. Individual life insurance, income protection and critical illness policies accounted for £5.32 billion of the total—up 10% on 2023. Notably, this increase came despite the number of individual claims holding steady at 275,000, suggesting that the average claim size has risen sharply. The average individual payout climbed by 10% year-on-year, reaching £18,700.
Critical illness insurance saw a 5% increase in total payouts, which rose to £1.3 billion. The average payout for these claims stood at £67,600. Cancer remained by far the most common reason for a claim, accounting for 62% of all critical illness payouts. Total claims relating to cancer alone reached £812 million, a 4% increase on the previous year.
Individual income protection claims saw a particularly steep rise, increasing 16% in total value to £204 million. The average payout for these claims increased by 6% to £10,000. Musculoskeletal problems, such as chronic back and neck pain, were the leading cause, responsible for 34% of claims paid and at least £32 million in associated payouts—a figure likely to be higher given incomplete reporting in some cases.
When group income protection policies are included, total income protection payouts reached £969 million, with the average claim across group and individual policies valued at £25,133.
The ABI highlighted the continued high proportion of successful claims, with 96.9% of all new protection claims being paid in 2024. This consistent performance has held above 97.9% for individual policies over the past decade, reinforcing consumer confidence in the sector. Where claims were declined, the most common reasons were non-disclosure of pre-existing medical conditions and failure to meet policy criteria.
Term life and whole-of-life policies together made up the lion’s share of protection payouts. Term life policies, often used to provide financial cover for families in the event of untimely death, paid out £4.025 billion across 50,499 new claims. Whole-of-life policies, which are typically used to help cover funeral costs or provide inheritance, paid £1.532 billion across a staggering 206,839 claims.
The leading provider of protection insurance in the UK is Aviva, which holds approximately 40% market share in individual protection policies, with around 2.7 million individual policies in force.
Rebecca Ward, assistant director and head of health and protection at the ABI, commented that behind every payout lies a human story of hardship. “The financial support these products can provide is a lifeline for those who need it, when they need it most,” she said. “With nearly £22 million paid in claims every day in 2024, protection insurers remain committed to helping people recover when faced with serious illness or grief.”
The data offers a clear indication of the scale and societal value of the UK’s protection insurance industry. As the sector continues to evolve in the face of demographic change and increasing health complexity, insurers are expected to maintain a focus on prompt, fair claims handling and improved policyholder education to further reduce disputes and non-disclosure issues.
The ABI, which represents more than 300 firms including most major UK insurers, notes that the industry supports over 300,000 jobs nationwide and manages investments worth £1.4 trillion.
