Payments by UK insurers
against claims under life and critical illness (CI) policies in
2010 totalled £1.916bn ($3.1bn), an increase of 6.4% compared to
with 2009, the Association of British Insurers (ABI) has reported.
A total of 40,343 claims were paid in 2010 with the average amount
paid £47,166. According to the ABI this is almost double the UK
average salary.

Of the total paid in 2010,
£1.14bn was on 29,182 life insurance claims and represented a
significant increase of more than 15% compared with the £987m paid
in 2009. Of a total of 29,716 claims, 1.8% (534) were rejected,
down from 2% in 2009.

In the CI sector, a total of
12,409 claims were received of which 10.1% (1,248) were rejected.
The rejection rate was up from 9.7% in 2009. The total amount paid
under CI claims in 2010 was £776m, down 4.5% on the £813m paid in
2009.

Since 2008, the average rejection rate of CI claims has
been 9.9%, down considerably from a 16% rejection rate in 2007. The
ABI attributes the fall in the rejection rate to stricter
underwriting standards and action taken in 2008 to improve consumer
understanding of CI insurance.