The Financial Conduct Authority (FCA) is teaming up with partners across industry, government and consumer groups to widen access to protection insurance for the millions of people who currently have none.
New figures show that around 58% of adults hold no life insurance, critical illness cover or income protection, and 59% of that group say they have never even considered taking out a policy. The regulator warns this leaves large numbers of households exposed to financial hardship in the event of a death, serious illness or sudden loss of income.
Several organisations are now stepping in to close that gap. The Money and Pensions Service and the Digital Property Market Steering Group will prompt consumers to think about protection at pivotal life moments, such as starting a family or buying or renting a home, while the FCA looks at how further partners might raise the issue at the right time.
The Protection Distributors’ Group is set to lead a consumer awareness campaign aimed at groups least likely to buy protection products, and the Association of Mortgage Intermediaries will work to help advisers hold better conversations with customers about cover.
As the body responsible for regulating financial services firms in the UK, the FCA is tasked with ensuring markets work fairly and deliver good outcomes for consumers, while encouraging healthy competition and innovation among providers.
This latest push builds on the regulator’s Pure Protection Market Study and will concentrate on groups disproportionately likely to go without cover, including renters, the self-employed, gig economy workers, lower earners and people with pre-existing medical conditions.
The FCA also plans to run a webinar to clear up misunderstandings among firms about its rules, and will work alongside the Association of British Insurers to cut delays around accessing medical records. Firms interested in joining a related TechSprint have been asked to register by 13 November.
Separately, the regulator has published findings on switching, claims handling and fair value across the protection market, concluding that competition is generally working well but reminding firms of their obligations under the Consumer Duty and product governance rules. No new market-wide measures are planned for now, though the FCA says it will intervene where firms fall short.
Financial Conduct Authority director of competition Graeme Reynolds said, “Competition in protection insurance works well for existing customers. But we’re working with partners to increase coverage – so that more people are protected when they or their families need it most.”
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