Protection payouts hit £3.4bn in 2014

Insurers paid out £3.4bn to protection policyholders in 2014, industry figures show.

Association of British Insurers members saw a total of 131,543 claims in 2014, up 28 per cent from the 2013 figure of 102,384.

The increase came as a result of a surge in claims for whole of life insurance policies, which rose from 43,529 to 72,962 year-on-year. The ABI says this was primarily because a new entrant joined the UK market.

The increase in claims means insurers paid out a total of £3.4bn to protection policyholders last year, up from £3.1bn.

However, at the same time, the average protection claim paid actually decreased from £31,140 to £26,813.

ABI director in charge of protection policy James Dalton says: “These figures show that 97.7 per cent of all types of protection policy claims are paid allowing people to focus on other challenges.”

2014 protection payout figures – product breakdown