The FCA has urged the insurance sector to do more to help consumers access products that can support them and their families in the event of serious illness or death.
Its interim findings from a review of competition in the pure protection market indicate that, for consumers who already hold protection insurance, the market generally functions well. There is a broad choice of products, most policyholders are able to make successful claims, and the cost of cover has remained largely steady in recent years.
However, 58% of adults still do not have any form of pure protection insurance, despite many standing to benefit from such cover. The FCA is seeking to reduce this level of under-protection.
Research suggests this gap is driven by a lack of awareness, with many consumers not recognising their needs or being prompted to consider protection products. Additional barriers include affordability concerns, misunderstandings about how products work, and shortcomings in the sales process.
The FCA has identified examples of firms providing strong value to customers and plans to carry out further analysis using updated 2025 data ahead of publishing its final report.
It will also explore ways to improve the switching process, ensuring that any change of provider clearly benefits consumers and aligns with their needs.
The FCA is inviting feedback on its interim findings until 31 March 2026. Its final report, including conclusions and an update on progress, is due to be published in Q3 2026.
Graeme Reynolds, director of competition and interim director of insurance at the FCA, commented: “These insurance products play a vital role in helping families manage some of the most difficult experiences in life. While competition in the market is mostly working well for consumers, many more people could benefit from protection. We will work with industry to reduce this gap, to help consumers navigate their financial lives.”
