Eleven members of the Association of Financial Mutuals (AFM) approved more than 92% of new income protection (IP) claims made in 2025.
Furthermore, AFM members increased IP sales by around 7%, selling more than 72,000 policies in 2025, an increase of nearly 5,000 from 2024, with a value of £47.3m.
Claims approved
In total, of the 8,337 new claims made during 2025 these AFM members paid out 92.6%. These figures were slightly down from 2024 when of the 9,420 new claims made 94.1% were approved.
In comparison, several providers who supplied data to Health & Protection’s latest Individual & Business Protection Report only approved around 90% or fewer claims when including those already in payment.
There was an average value of claims paid of £21,435 among the AFM cohort.
Of the claims declined, 49% were rejected due to a non-disclosure at the time of application or claim and 23% were rejected as the claim concerned an excluded condition or declinature under standard policy terms and conditions.
The providers paid £91m in income protection benefits to members which was on par with payouts in 2024 and a significant increase from the £70m in 2023.
The most common reason for a claim continued to be musculoskeletal conditions, accounting for 33% of new claims. However, this was a notable decrease from 2024 where musculoskeletal conditions accounted for 40% of new claims.
The next most common claim reason was ‘other’ conditions accounting for 18% of new claims.
Mental illness accounted for 9% of new claims, a slight decrease from the past two years where mental illness represented 11% of new claims.
The average duration of claims in 2025 was 66 weeks, an increase from the 53-week average observed in 2024.
Although 43% of claims had been in payment for less than a year, nearly a quarter remained in payment after five years, illustrating the significant capacity for income protection policies to provide financial assistance to members dealing with long-term illness.
AFM members also provided rehabilitation to help 231 members recover.
Eleven mutuals
The eleven mutuals which supplied data for the figures were British Friendly, Cirencester Friendly, DG Mutual, Holloway Friendly, LV=, National Friendly, PG Mutual, Shepherds Friendly, The Exeter, Wesleyan, Wiltshire Friendly.
AFM chief executive Andrew Whyte (pictured) said: “As consumers continue to weather volatile economic conditions and the continuing cost-of-living crisis, income protection products provide a valuable safety net to support individuals through unexpected injury or illness.”
“The government and regulators have recognised the protection gap as a growing concern for the population’s financial resilience.
“AFM members are helping to bridge that gap by offering cost-effective products which meet the needs of consumers who are not well served by traditional financial institutions.”