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May 2, 2019updated 10 May 2019 12:58pm

A record £5.3bn paid out in protection claims in 2018

By Patrick Brusnahan

£5.3bn ($6.9bn) was paid out in the UK for protection claims in 2018, which is a record number.

This is according to the Association for British Insurers (ABI) and Group Risk Development (GRiD).

The £5.3bn protection claims paid out in 2018 is a £200m increase year-on-year.

In addition, the firms found that:

  • Claims paid surpassed 200,000 for the first time;
  • Nearly every claim made was paid (97.6%), but this is lower than the 97.8% in 2017;
  • Average life insurance payouts reached £81,000, the highest average on record;
  • More than 35,000 families/beneficiaries were supported following an unexpected bereavement, to the tune of £0.29bn, and
  • Payouts equal to £14.5m were paid every single day.

However, the results this year include the figures from the Association of Financial Mutuals. These were not included in 2017.

Roshani Hewa, assistant director, head of health and protection at the ABI, says: “It’s good to know that families going through some of the worst times, dealing with a loss and serious injury or illness, are at least getting more support from insurance products than ever before. The growing size of a typical life insurance claim shows how much of a difference such cover can have, and the potential difficulties families without it might face.

“Falling ill or being injured can be traumatic, especially if you find yourself unable to work.  Protection insurance is there to ease the financial burden, so it’s heartening to see the levels of protection showing such positive growth, particularly considering the excellent mental health support many products provide.”

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AIG Life paid out £92m ($120m) in life and critical illness claims in 2018, a 26% rise from the £73m paid out in 2017.

According to the firm, this has helped over 1,500 individuals and families over the year.

Furthermore, AIG Life paid 99% of life claims in 2018, the same as in 2017. In addition, it paid 94% of critical illness claims, up from 93% last year.

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