Protection insurers paid out £8bn in 2025

Protection insurers paid out £7.84bn in claims across 2025, according to new data from the ABI and Group Risk Development.

The figures, released today (29 June 2026), represent both individual and group protection claims and include payouts for critical illness, life, total permanent disability, income protection and whole life claims.

The ABI reported that payouts were made for 97.9% of the 258,000 new individual policy claims across the year, amounting to total compensation of £5.15bn – a marginal fall of 3% from the previous year.

The data also highlighted the growing prevalence of mental health related work absences, with £39m of the £209m paid out for income protection claims being related to such issues. Musculoskeletal conditions, however, remain the most commonly cited reason for income protection claims.

Meanwhile, critical illness payouts have shrunk by 3% to £1.25bn between years. Despite this, payouts have now totalled more than £1bn in each of the last five years, with cancer remaining the most common illness, accounting for 65% of all notifications.

Cornerstone of resilience

Rebecca Ward, assistant director and head of health and protection at the ABI, said: “Protection insurance remains a cornerstone of financial resilience, helping customers and their loved ones navigate life’s most difficult moments.

“Each year, income protection, critical illness and life insurance policies provide vital financial support to thousands of people facing bereavement, illness or injury.

“With modern products increasingly including health benefits, the sector is also helping people remain economically active and in work, directly supporting the government’s ambition to keep Britain working and drive economic growth.”