Income Protection Action Week: protection claims – are we telling the whole story? The Exeter

September 25, 2025

Written by Jack Southcott, Head of Protection Proposition at The Exeter

In the world of protection insurance, trust is everything. It’s the foundation on which customers make decisions about safeguarding their financial future. But trust must be earned, and maintained, through transparency, especially when it comes to income protection claims.

Looking beyond the headlines

Each year, insurers publish claims statistics to demonstrate their reliability. But how these figures are presented can vary significantly. Many providers report a combined claims paid percentage across income protection, life insurance and critical illness.

While this may look reassuring on the surface, it risks obscuring the true picture of income protection performance – a product that generally requires a more nuanced approach than life insurance or critical illness.

Some insurers also include claims already in payment from previous years, rather than focusing solely on new claims submitted in the reporting year. This practice can inflate paid percentages and make it difficult to know the likelihood of a successful claim. Is this transparent enough? I’d argue not.

Stories versus statistics

I’ve heard a few times in recent years that claims stories matter more than statistics, because they resonate with potential customers and help advisers demonstrate the need for protection.

From my perspective, both are important, but they do different jobs, so there’s not really any need to compare which is most useful.

Stories help to generate emotions and bring the need for income protection to life, while statistics hold insurers to account and tell us at a high level how successfully our products are meeting customer needs.

Meeting the mental health challenge

Mental health is no longer a niche concern. It’s a growing pandemic, particularly among young adults – our future income protection customers.

ABI data in 2024 showed a year-on-year increase in mental health claims, to over 1,000, and a declining trend in those that were paid, at just 66% of new claims. With misrepresentation the main reason for claims not being paid, we need to work together as an industry to encourage disclosures in this area.

We also need to develop our underwriting philosophies to ensure we’re appropriately assessing the risks, whilst providing as much support as possible to those with pre-existing mental health conditions.

A call for transparency

Like most insurers, The Exeter are proud of our claims performance, but we also know there’s more to do. That’s why we’re calling for greater transparency across the industry.

Let’s separate income protection claims from life insurance and critical illness in our reporting. Let’s report on new claims, not cloud our numbers with legacy ones. And let’s be honest about current and future challenges – especially when it comes to mental health.

Only then can we continue to build trust in claims performance and ensure income protection remains relevant for the next generation.