UK life insurance and protection claims surpass £8 billion in 2024 – key insights from Caspian
The UK insurance sector hit a significant milestone in 2024, with life and protection insurance providers collectively paying out more than £8 billion in claims, according to recent figures from the Association of British Insurers (ABI) and Group Risk Development (GRiD).
This achievement underscores the essential role of protection products such as life insurance, income protection, and critical illness cover in offering financial resilience to individuals and families during times of crisis.
Over £21 million paid out daily to UK policyholders
Across the year, the insurance industry distributed an average of £21.9 million per day in claims related to bereavement, illness, and injury. This includes both group and individual policy claims, showcasing the breadth of support available through UK protection policies.
A closer look at individual protection claims
From the £8 billion total, £5.32 billion was paid out through individual protection policies. Despite the number of claims holding steady at 275,000, the average claim value rose by 10%, climbing from £17,100 in 2023 to £18,700 in 2024.
The industry continues to show a strong track record of reliability, with 97.9% of all individual claims approved. Claims that were declined generally involved undisclosed pre-existing health conditions or instances where policy definitions weren’t met.
Rise in critical illness claims
Payments for critical illness (CI) policies grew by 5%, reaching £1.3 billion in 2024. The average CI claim stood at £67,600. Cancer remained the most common reason for claims, representing 62% of all CI payouts. There was also a 4% rise in cancer-related claim values, which totalled £812 million.
Income protection claims increase sharply
There was also a notable rise in income protection (IP) payouts, which increased by 16% year-on-year to £204 million, a £28 million jump from 2023. The average payout for income protection reached £10,000.
Musculoskeletal disorders, including common conditions like back and neck pain, were the top cause for IP claims, making up 34% of total claims and accounting for at least £32 million in benefits paid.
Continued growth of the group protection market
The group insurance sector also saw strong performance, with £2.59 billion paid out in 2024, an increase of £99.2 million compared to the previous year. According to GRiD, all group protection categories experienced year-on-year growth, reflecting greater employer investment in employee benefits and financial wellbeing.
Caspian’s perspective
Oliver Rayner, Managing Director at Caspian, shared his reflections on the latest data:
“Each one of these claims represents a moment where someone needs financial certainty during an uncertain time. At Caspian, we believe the true value of protection insurance lies in its ability to step in when people are at their most vulnerable, helping them manage not only the financial impact, but also regain a sense of stability.”
Final thoughts
The £8 billion paid in protection claims across the UK in 2024 speaks volumes about the relevance and reliability of life insurance and income protection products.
As uncertainty remains a constant in people’s lives, the insurance industry’s commitment to providing dependable financial support continues to make a meaningful difference.
