Group and individual protection policies paid out a combined record of £7.34bn in claims in 2023, data from the Association of British Insurers and Group Risk Development shows.
Individual policies paid out more than 275,000 life insurance, income protection and critical illness claims, totalling £4.85bn.
This was a 5 per cent increase in the number of individual claims paid and a 14 per cent increase in the total value of claims paid compared to 2022.
ABI director of policy, long term savings, and health and protection, Yvonne Bruan, said: “Every single day in 2023, the protection insurance industry paid out over £20mn to individuals and families affected by serious accidents, illness or even the deaths of loved ones.
“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.”
The total value of individual critical illness claims also increased to a record £1.2bn a rise of 13 per cent, or £136mn, when compared to 2022.
The number of critical illness claims also increased by 10 per cent from 2022, with the average claim for 2023 standing at £67,267. Cancer remained the most common cause for these claims, totalling £777mn.
Meanwhile, the total payout for individual income protection claims hit £177mn, an increase of 2 per cent compared to 2022, bringing the average claim payout up to £9,425.
This was despite a drop in the number of individual income protection claims in 2023 compared with the highs seen during the Covid-19 pandemic.
Musculoskeletal issues such as neck and back pain were found to be the main cause for an individual income protection claim in 2023, though mental illness claims accounted for the highest value at £37mn.
As of 2023, more than 1,660 individual income protection claims have been in payment over 10 years, with 376 of those claims in payment for more than 20 years.
tom.dunstan@ft.com
What's your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com
