Vision

Agentic AI in income protection. Recovery stays human work.

29 October 2026
Dirk Kon
24 min

The agents do the paperwork. The people do the recovery.

Where the market stands

Income protection is a product that pays out for years. In 2025 the UK group risk industry paid a record £2.69 billion in claims. Group income protection accounted for £670.7 million. There were 7,920 new group income protection claims, at an average of £29,026 a year, and 17,403 claims in payment at 31 December 2025 (GRiD). On the individual side, insurers paid a record £209 million in income protection claims in 2025, up 2% (ABI figures, as reproduced by Actuarial Post). Around 0.3 million new individual income protection policies were sold in 2024. Only 6% of UK adults held income protection in 2024 (FCA, Financial Lives).

  • £670.7mpaid in group income protection claims in 2025
  • 17,403group income protection claims in payment at the end of 2025
  • 6%of UK adults hold income protection

The regulator has looked closely at this product. In its market study of pure protection, the FCA found that income protection has the lowest claims ratio of the protection products, around 40%, and the lowest claims acceptance rate, around 86% against 98% across all protection products. It explains much of this by the product itself: the payout depends on how long a claim lasts, and claims "require more in-depth (and periodically repeated) medical assessments". In its final report of September 2026 the FCA adds that claims management costs are higher "given monthly payouts and ongoing claim reassessments", and that rehabilitation services can mean fewer claims and shorter claim durations. It found no widespread concerns about fair value. The cost sits in duration, and in the work around every claim.

The causes are shifting. Cancer was the main cause of new group income protection claims in 2025, at 28%; mental illness was second, at 20% (GRiD). In individual income protection, mental health conditions accounted for 19% of claims paid (ABI). Across the workforce, the ONS estimates 148.8 million working days lost to sickness or injury in 2025. Work-related stress, depression or anxiety affected 964,000 workers in 2024 to 2025 and accounted for 62% of all working days lost to work-related ill health (HSE).

On the other side of the table stands the insured person. In individual cover it is your own customer, who has often paid premiums for years for this one moment. In group cover it is the employee of your client, the employer. Either way it is not a third-party claimant. That makes income protection different from personal injury, and it makes the claim moment heavier: this is where the insurer proves its worth to the person who has been paying for it. The UK has 4.44 million self-employed people (ONS, May to July 2026), and the FCA has asked for industry work on gaps in income protection for groups including the self-employed.

An income protection claim is a chain of five to ten parties. Claimant, employer or adviser, claims assessor, the insurer's medical officer, the GP who writes the fit note and the report, an independent medical examiner, an occupational health provider, a vocational rehabilitation consultant, and in a dispute the Financial Ombudsman Service. The assessor directs a file that runs for months or years, with periodic reviews and a monthly benefit. Almost everything in between runs by email, with medical reports as attachments.

And the wider system is under strain. 2.8 million working-age people are economically inactive due to health conditions, 800,000 more than in 2019 (Keep Britain Working review). 93% of fit notes in England deem the patient 'not fit for work'. 86% of large employers offer some form of occupational health provision, against 30% of smaller firms. The BMA describes a dire shortage of specialist occupational physicians, with a workforce that has been declining since 2009. Every week a claimant waits for an occupational health opinion is a week of benefit and a week further from work.

Policy is moving. Since 6 April 2026, Statutory Sick Pay is paid from the first day of absence and the lower earnings limit has gone (Employment Rights Act 2025). The Keep Britain Working review proposes workplace health provision that builds initially on occupational health, income protection and private insurers, and its September 2026 update aims at a British Workplace Health System. And the FCA wants to close the protection gap: 58% of people hold no protection product, and 59% of those have never considered their protection needs.

Why it gets stuck at insurers

Income protection is a chain problem.

  1. Before
    The notification comes from three sides

    Through the adviser or the employer, by phone, by an online form or still as a PDF by email. Then a phone intake that the assessor retypes. Three entrances for one absence.

  2. Inside
    The process runs

    Claims assessor, medical officer and rehabilitation team know each other. Once the insurer is in contact with the claimant, it flows. That is not where the gain is.

  3. Between
    Medical as an attachment

    The request for a GP report goes out by post or email. The vocational rehabilitation report arrives as an attachment and is retyped into the core system. The claimant does not see the file.

  4. After
    It comes back

    A claim ended without an occupational health opinion, an independent expert or a clear explanation comes back as a complaint and at the Financial Ombudsman Service.

It is a chain problem. Inside, it runs; the work sits before it, between and after.

Inside the insurer the process runs. Once the insurer is in contact, it flows: a named assessor, a medical officer, a rehabilitation team on request, deadlines in view. That is not where the gain is. The work sits before it and between. The notification that arrives through the adviser, the employer, the phone or a PDF, and is then retyped in a phone intake. The claimant who calls to ask whether his documents have arrived and when the first payment comes. The request for a GP report that goes out by post. The vocational rehabilitation report that arrives as an attachment and is retyped into the core system.

And after: what was not captured at the front comes back at the end. A recent decision of the Financial Ombudsman Service shows how. An insurer ended a group income protection claim on the opinion of its chief medical officer. The ombudsman found that it was for the insurer to show, on the balance of probabilities, that the claimant no longer met the definition of incapacity, and noted that no occupational health specialist and no independent medical expert had been asked to report. The claim was reinstated, with backdated benefit and £500 for distress and inconvenience (FOS, DRN-5902757, October 2025). In 2024 to 2025 the ombudsman received 805 new income protection complaints and upheld 20%. The rule behind it is short: an insurer must "handle claims promptly and fairly" and "provide reasonable guidance to help a policyholder make a claim and appropriate information on its progress" (FCA, ICOBS 8.1.1R).

Insurers manage on overhead, and income protection is often a small book next to larger ones. Attention goes to the products with high volumes and simple processes. Income protection has a process in which medical, vocational and financial evidence run together, with a benefit that can last for years. That process has rarely been redesigned. It has been digitised as it was: a form online, the rest by email. It is not even measured end to end: in a 2024 review of bereavement claims the FCA found that few insurers capture end-to-end claim journey times by product type.

A system that only improves the inside does not structure that flow of information. At best it makes the mailbox faster.

Only the insurer can break this. It is your customer or your client's employee, your policy, your medical team and your benefit. You decide what you need to assess incapacity, in what form, and who may see what. Capture that at the front: in fields, in a portal, with a status the claimant sees. That is a choice about who runs the process.

What AI really changes, and what it does not

For the first time the computer supports us in the substance of the work, instead of us supporting the computer. An income protection assessor today reads medical reports, vocational reports, accounts and payslips, and turns them into a decision on incapacity and a benefit. The machine can now share that reading, ordering and summarising. That reverses the relationship, and that is why this adoption is moving so fast. In 2024, 95% of insurance firms told the Bank of England and the FCA that they already use AI.

The technology is not the challenge. People are, and the willingness of an organisation to let go of a process that has worked for twenty years. An AI pilot that summarises medical reports while those reports still arrive by email speeds up one task and leaves the process as it was. Then you have a faster process from 2005.

AI on poor data is impossible. In an income protection file that is even sharper. Medical information is not for everyone. The questions put to a doctor must be traceable. A decision on benefit from a model without an explanation does not hold under the Consumer Duty or at the ombudsman. UK data protection law says that a significant decision based on health data may not be taken solely by automated means unless strict conditions are met, and that the person must be able to obtain human intervention and contest the decision (UK GDPR Articles 22B and 22C, as recast by the Data (Use and Access) Act 2025). The FCA has said it will not write new regulations for AI and relies on the frameworks it has. In October 2026 it found that some firms' AI decisions were poorly documented with limited audit trails, and that some treated governance as a point-in-time exercise. The ABI's guide to responsible AI builds on five principles, including contestability and redress. Permissions per role, logging per question and a file in one place are the precondition for switching AI on at all.

AI forces you to get your information flows in order.

That is the real change. Every insurer keeps thinking inside its own bubble: its own system, its own department, its own workload. But a claim never starts there. A claim starts with the insured person, on the day they fall ill. That is where the process starts, and that is where you have to approach it from. Then you structure the data at the source. Then you decide which fields have to come in and which document belongs to which part. In effect, as an insurer you say: this is what I need to assess incapacity, and this is how you provide it. That is how you take control of the chain.

The result is that the data comes together in one portal, with everyone in it, each with their own role and their own permissions. Claimant, employer or adviser, assessor, medical officer, rehabilitation partner: the same information, each their own part, and medical information only for those allowed to see it. That is exactly the situation agentic AI needs in order to help. What that looks like in practice is set out in the use cases on AI solutions.

And there is something AI does not change. People need real contact, most of all at the moment they are hurt. A self-employed tradesman who falls ill and sees his income disappear is exactly that moment. Recovery and return to work are human work. No model calls a person who doubts, after burnout, whether they will ever go back.

Our vision: hybrid, human where it counts

We believe in a hybrid model. Automate everything around process, administration and benefit payments. Make everything around the claimant, their recovery and their return personal. The online model gets stronger through the personal contact, and the contact gets better through the online model.

short absence · file 2026-07318 · broken ankle, six to eight weeks eight weeks

Agents

  • Tue 07.50 notification complete, from the hospital
  • Tue 07.51 file, login, deferred period explained
  • Tue 09.10 policy, prognosis, signals checked
  • Tue 09.10 proposal ready
  • Tue 09.15 assessor approves
  • Tue 09.16 date of first payment in the app
  • week 4 benefit on its way
  • week 6 review prepared
  • week 8 return to work, benefit stops, file closed

9 actions · 0 emails · 0 status calls

People

Tue 09.15 · 5 minutes

The assessor reads the proposal and decides.

week 3 · 25 minutes

He presses 'Would you like to speak to someone?'. Within the hour an assessor calls. About the job that is waiting and whether he can climb a ladder again.

Thu 14.00 · the long file

The assessor is at the home of a member who has been off with burnout for two years. That is where his time goes.

Short absence: the agents do the handling. The human is there at the moment it counts.

In practice it looks like this. Short absence with clear evidence can run straight through, within limits the assessor sets in advance: a broken ankle, an operation, six weeks off. The notification comes in complete, in fields, the deferred period counts down, the prognosis fits the diagnosis, and the benefit starts and stops with the return to work. No person needs to be involved, unless the claimant wants one. Then there is a button, and within the hour someone calls who has the file open. Long-term and complex absence is the other way round: burnout, a chronic condition, a self-employed person watching the business slip away. There the assessor is the product. The machine takes off his hands everything that is not about the person: deadlines, documents, chasers, calculations, drafts.

That makes the human factor more important than ever. When every insurer runs the same models, how you help someone through their recovery is the only thing left that sets you apart. Whoever does it well makes it their brand.

That requires a different process from the one insurers have today, inside and outside. It starts with the claimant, and from there with the claims team. He files his tax return online, tracks his parcel on his phone and logs in to his bank. And his incapacity? A form, a phone call, and then a wait.

Seven principles

  1. Start with the claimant. The process starts with the person who is ill. Notifying an absence should be possible online, on the phone, in ten minutes, with a file straight away and an explanation of what happens now and when the first payment comes.
  2. Ask for data in fields. Only what is needed to assess incapacity, mandatory and validated. Payslips, accounts, fit notes and reports as documents on the right part of the file. Incomplete does not come in.
  3. Be transparent about the process and the benefit. The claimant sees where the claim stands, what the next step is, when the benefit comes and how it is made up. That alone removes most of the status questions (see 'What it delivers').
  4. Medical data only for those who may see it. A secure channel to the medical team, permissions per role, every access logged and revocable at once. The claimant sees who sees what. The Access to Medical Reports Act 1988 already gives a person the right to see a report from their own doctor before it is supplied to the insurer; the file makes that easy instead of a letter.
  5. Human where it counts. Short absence with clear evidence runs without intervention, within limits the assessor sets, unless the claimant wants to talk to someone. Long-term and mental health absence never: there a named assessor has time, because the machine does the rest.
  6. AI prepares, the human decides. Summary of medical and vocational reports, signals, deadlines, calculation, drafts: the machine prepares. The assessor reviews and decides on the benefit. Explainable, logged, and so defensible under the Consumer Duty, at the ombudsman and under UK data protection law.
  7. Connect once. Medical officer, independent examiner, occupational health, vocational rehabilitation, employer and adviser connect once and work in the same file. No email rounds, no loose uploads; the report lands where it belongs.

Do you recognise this in your own chain? Book a conversation.

How it works

One layer at the base: Claim360, the orchestration layer over the core system that stays in place. Claim360 connects the chain. On top of it the portal brings the data in properly, the workflow keeps track, and only then does AI work.

  1. The human decides and has the conversation

    The claims assessor reviews every proposal, decides on the benefit, and has time for the claimant.

  2. AI layer prepares

    Summary of medical and vocational reports, triage, signals, deadlines, reserving, calculation, drafts. Explainable and logged, within the permissions of whoever asks.

  3. Workflow automation monitors

    Deferred period, deadlines, tasks, reviews and benefit payments run by themselves, from notification to return to work.

  4. Portal (Azori) steers data quality

    Notification in fields. Status and benefit visible to the claimant. Medical only for those who may see it.

  5. Orchestration layer (Claim360) connects the chain

    Roles, permissions, triggers and deadlines across the core system; benefits and reserves written back to the core.

  6. Core system stays in place

    The core system you already have. Claim360 connects to it.

One layer at the base: Claim360, the orchestration layer over the core system. Portal, workflow and AI run on it. Whoever starts at the top builds on sand. And at the top stands a person.

The portal (Azori). A personal digital environment in the insurer's brand, for claimant, employer or adviser, assessor, medical officer, occupational health and rehabilitation partner. Everyone sees only what their role needs. The claimant sees status, next step, benefit statements and messages, and reports recovery or a change in income online. The notification comes in in fields. Communication runs in the file.

The orchestration layer (Claim360). An API-first layer over the existing core system that handles roles, permissions, triggers and deadlines and writes benefits and reserves back to the core. This is the layer that connects the parties. Without it the file is complete nowhere, and without a complete file AI cannot work.

Workflow automation. What the system knows, nobody has to watch. Examples: the deferred period counts down from the notification and prepares the first payment; a medical report that comes in creates the task for the medical officer; a vocational rehabilitation report triggers a proposal for a phased return; a review runs as a task with a date and an owner; a file that has been still for three weeks escalates to the team leader; a return to work stops or adjusts the benefit; a payment goes straight to the core system and the accounts after approval.

The AI layer. On a file that is right, the Claimassistent can take work off the assessor's hands. The use cases we set up: summary of medical and vocational reports for the assessor, with that assessor's permissions; triage on arrival, short and clear or long and complex; flags for missing evidence, running deadlines and unusual patterns over time; policy check and cover tested against the core system; document classification, every document on the right part of the file; reserve proposal from policy, income and prognosis; calculation of the benefit as a proposal; draft communication in plain English, for the claimant and for the adviser or employer; and straight-through handling of short absence within bounds. Every proposal is explainable, every question logged, every decision on the benefit stays with the assessor.

That is the difference with AI on the current process. There, a model reads loose emails and attachments, with medical data in them. Here, it reads a file, within the permissions of whoever asks.

And more importantly: you are ready for the future.

Whoever has the file in order is not tied to one model. The AI layer works on the principle 'bring your own LLM': the insurer never depends on a model from DCSolutions or from anyone else. The model at the top changes, the base underneath stays. No lock-in on an LLM, and no lock-in on us.

Worked out for income protection: income protection claims in one file.

The hub of the chain

We want to be the hub of the income protection chain, by letting every party connect once, without forcing anyone into one system.

It works like this. The claimant and the assessor work in the insurer's portal. Every other party, medical officer, independent examiner, occupational health provider, vocational rehabilitation consultant, adviser, employer, connects to Claim360 once on behalf of the insurer: through the Azori portal, or through an API on its own system. From that moment that party is connected with every insurer running Claim360. A rehabilitation provider working for four insurers gets its referrals in one place and delivers its reports in one place. An independent examiner sees exactly the documents that belong to the question put to them, and nothing more.

  • 15possible lines between six parties around one file, today
  • 6lines to one truth, with Claim360
  • 1connection, for every insurer running Claim360

In income protection two parties join who play no part in personal injury. The first is the adviser: in 2024, 80% of new protection policies were sold through an intermediary (FCA). The second is the employer, who holds the policy in a group scheme. Both belong in the file, with their own permissions, so the claimant does not have to move between counters. Employees covered by a group policy can take a complaint to the Financial Ombudsman Service themselves (FCA, DISP 2.7.7G). The file has to be fair to them, too.

And the next party in the chain is workplace health. The Keep Britain Working review wants workplace health provision to build on occupational health, income protection and private insurers. Statutory Sick Pay now starts on the first day of absence. All of that traffic is either structured or it is email. Whoever has the file in order now connects later. Whoever does not, retypes.

The hub enforces nothing. The insurer decides who connects, what they see and what they have to provide. In return the chain gets one standard, one file and one truth, with a medical separation that depends on permissions.

For medical experts, occupational health and rehabilitation providers: connect once to Claim360.

What it delivers

Self-service is the best-known success formula of the digital world.

You track a parcel on your phone to the front door. A transfer, a tax return, a repair: you log in and see where it stands. Nobody calls to ask whether something has arrived. For the self-employed person at home, ill, more is at stake, but the need is exactly the same: to know where I stand, and when the money comes.

In income protection a self-service portal does four things at once. It streamlines the process: everyone looks at the same information, with the tasks and deadlines in it, so at every moment it is clear whose turn it is. It builds trust: a claimant who sees the benefit statement and the payment date does not call, and does not look for a lawyer. It takes the administrative load off the assessor: the notification comes in in fields, the report lands in the file, searching mailboxes and retyping disappear. And it shortens the cycle time, because nobody waits any longer for an answer that is already in the file.

  • -30%on average per file in incoming phone and email traffic, and less administration
  • -80%incoming status questions
  • 1file for every party involved

The figures come from practice. The parties in the Netherlands that work with the portal today see incoming phone and email traffic per file fall by 30% on average, and with it the administration; status questions fall by about 80%. Do the maths for your own department: count a week's status questions, take 80% off, and work out how many hours go back to the claimant.

In income protection there is a second effect, and it is the larger one. The cost sits in duration. The earlier a claimant knows where they stand, the sooner there is room to work on recovery. Early intervention only works when the notification is complete on day one and the assessor has time to call. The group market shows what that yields: in 2025, group risk insurers made 5,915 interventions within six months of an employee's first absence, 68% of newly absent employees returned to work, and 3,920 of them did so before a claim was even made (GRiD). The FCA notes the same mechanism: rehabilitation services can mean fewer claims and shorter claim durations. That is exactly what the hybrid model frees up time for.

Insurers have started on the employer side. One UK group insurer offers employers a portal to track the status of all their cases; in its pilot, 90% of claims were submitted online (Unum, 2024). The next step is the same view for the claimant: documents, messages, the next step and the payment date. That is where the difference lies, and the gain: the whole chain looks at the same file. That calm is measurable in cycle time, in benefit duration and in complaints.

An absence in 2026

Tuesday morning, 07.50. A self-employed electrician has fallen from a ladder. Broken ankle, an operation, six to eight weeks without work. From the hospital he notifies his absence in his insurer's app. Fields, no attachments. What happened, the expected duration, his treating doctor, and consent to request a report from his GP through the secure channel. He ticks that he wants to see the report before it is sent. He gets a file straight away, an explanation of his deferred period and the date of his first payment.

The same morning. Before the assessor has logged in, the Claimassistent has read the file. The policy is right, the notification is clear, the prognosis fits the diagnosis, no signals. The proposal is ready: accept the claim for the expected duration, benefit after the deferred period, a review in week six. The assessor reads it in five minutes and approves. The electrician sees it in the app, with the benefit statement and the payment date.

Week three. In the app there is a button: 'Would you like to speak to someone?' He presses it, because he is worried about a job that is waiting and whether he can climb a ladder again. The assessor calls within the hour. No queue, no menu, no 'let me just pull up the file'. The file is open, the machine has prepared the conversation. The conversation is about him, and about what is possible: someone to cover the job, a rehabilitation consultant who looks at adapted work.

In the same team runs a file that is two years old. A project manager, a member of her employer's group scheme, who has not returned after burnout. Medical officer, occupational health, a vocational rehabilitation consultant, her HR manager. All in the same file. The new rehabilitation report landed this morning, classified and summarised, and the proposal for a phased return is ready. This afternoon the assessor visits her at home. That is where his time goes.

Neither file produced an email. Neither claimant called to ask where things stood.

What we ask of insurers

Take control. It is your customer, your policy, your medical team and your benefit. Capture what you need at the front, in fields, in a portal, with a status the claimant can see. That is not an IT project. It is a choice about who runs the process.

Step out of the bubble. Compare yourself with the experience of the self-employed person who picks up their phone from a hospital bed.

Prepare for the chain that is coming. Workplace health provision will build on income protection and occupational health. The FCA wants more people, including the self-employed, to consider cover. Those people will expect to follow their claim the way they follow everything else. Whoever puts the claims journey in order now will have them later.

Do not start with AI. Start with the file. Put AI on a process that is right, with permissions per role and logging per question, and you take off the assessor's hands the work that is not about people. Put AI on the current process and you get a faster mailbox, with medical data in it.

And keep the human where it counts. Recovery is human work. When the models are the same everywhere, how you bring someone back to work is the only thing that sets you apart.

Sources