The UK protection insurance market paid out £7.84 billion across 280,992 claims in 2025, according to data from the Association of British Insurers (ABI) and Group Risk Development (GRiD). The figures span individual and group policies across life, critical illness, total permanent disability and income protection.
Life insurance drove the largest share by value, with 48,055 new claims paid at a 96.7% acceptance rate and a total of £4.03 billion. The average payout was £83,892. Whole of life policies generated the highest volume at 193,577 claims, paid at a 100% acceptance rate. Total payouts reached £1.48 billion at an average of £7,631 per claim.
Critical illness cover paid out £1.42 billion across 20,498 new claims at a 90.2% acceptance rate, with an average payment of £69,375. Cancer remained the most common cause of claim. Total permanent disability recorded 393 claims paid at a 66.7% acceptance rate, with payouts of £31 million at an average of £79,834.
The 2025 total sits just below the £8 billion paid in 2024, when individual payouts rose 10% year-on-year to an average of £18,700. Individual income protection claims grew 16% in total value that year to £204 million. The moderation in 2025 points to volume stabilisation rather than a structural pullback.
Income protection produced £880 million in payouts across 18,469 new claims at a 79% acceptance rate. The average claim value was £23,416. That figure covers both new claims and those already in payment, and includes data from the Association of Financial Mutuals.
One-third of individual income protection claims in 2025 were for musculoskeletal conditions. The concentration in that category has direct implications for group risk brokers and employee benefits advisers managing absence portfolios.
Musculoskeletal conditions also accounted for 39% of private medical insurance claim costs in 2025. Mental health is a growing secondary driver, with its share of claim costs rising as cancer's proportion fell from 20% in 2022 to 9% in 2025 year-to-date. That shift in claims composition is feeding into product design and pricing reviews across health and protection lines.
GRiD's own dataset covers the group component. Group life assurance paid £1.825 billion across 12,730 claims in 2025. Group income protection paid £670.7 million across 17,403 claims in payment, with mental illness the second leading cause of new claims at 20%, behind cancer at 28%. Group risk insurers made nearly 8,300 health and wellbeing interventions during the year, with mental health driving 48% of those cases.
Rebecca Ward, assistant director and head of health and protection at the ABI, said protection products were helping people remain economically active. "With modern products increasingly including health benefits, the sector is also helping people remain economically active and in work," Ward said.
The FCA is examining the market alongside these claims trends. The regulator found that 58% of UK adults hold no pure protection product, with affordability and low awareness cited as the main barriers. It plans to publish a final report on protection distribution in Q3 2026. For brokers, the combination of a large uninsured population and high claims acceptance benchmarks presents a material market opportunity.
Overall, the sector paid 95.9% of all claims across group and individual products combined. The data provides benchmarks used by brokers and advisers to assess product performance and support recommendations to corporate clients in the group risk and employee benefits market.
