ABI: Record £8bn paid out in vital protection claims during 2024

Protection policies continue to offer vital support with insurers paying out a record £8 billion in combined group and individual claims in 2024, according to the latest figures from the ABI and Group Risk Development (GRiD). That is the equivalent of £21.9 million paid out to people experiencing bereavement, illness and injury every day. 
 
Insurers paid out £5.32 billion for protection claims across individual life insurance, income protection and critical illness policies. This is a 10% increase in the total value of individual claims paid compared to 2023, despite the number of individual claims in 2024 remaining steady at 275,000. The average claim paid rose by 10% to £18,700 compared to £17,100 in 2023. 

Total value of individual critical illness payouts up 5%  

The total value of critical illness claims increased to £1.3 billion, reflecting a 5% rise compared to 2023 and bringing the average claim paid to £67,600.  
Cancer was still the most common reason for a critical illness payout, representing 62% of all claims paid.  Total payouts for the condition also hit £812 million, up over 4% from 2023.  

Total payouts for individual income protection claims increased to £204 million 

This is an increase of £28 million (16%) compared to 2023, with the average claim payout rising 6% year on year to £10,000. 

Musculoskeletal issues such as neck and back pain remained the leading cause for an individual income protection claim in 2024, accounting for just over a third of claims paid (34%) and at least £32 million in payouts.¹ 
 
The proportion of claims paid remains high at 97.9% 
 
The proportion of new individual claims paid has remained at or above 97.9% over the last decade.  
Common reasons for declined claims were policyholders failing to disclose existing medical conditions when they took out the policy, and not meeting the policy definitions. 

Rebecca Ward, Assistant Director and Head of Health and Protection at the ABI, said: "Behind every protection insurance claim is a person or someone close to them having to navigate a significant illness, injury or loss. The financial support these products can provide is a lifeline for those who need it, when they need it most. 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.” 
 
Breakdown of combined individual and group claims using data from the ABI and GRiD 

 
 *Includes figures from the Association of Financial Mutuals 
**Figures are for both new claims and income protection claims in payment 

Footnotes

1 - Claim reason is not available in all cases. If reported in full, it is likely that musculoskeletal claims payouts would be higher than £32 million.  

Products explained  

Critical Illness (CI) cover: A policy that pays out a lump sum when the policyholder is diagnosed with a specified illness. Cancer is the most common cause of claim.
   
Total permanent disability (TPD) insurance: A policy that pays out a lump sum payment if you become permanently disabled and can't work anymore. It can be provided within a critical illness policy or as a standalone product.  

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.   

Whole of Life Insurance: A product that covers the policyholder until the day they die. It typically allows the policyholder to build a small pot of savings to use to cover funeral costs, or to leave an inheritance to family members. Also known as ‘life assurance'.  

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.