MS24/1: Pure Protection Market Study

Read the Interim Report (PDF)[2]

Read the Consumer Research Report (PDF)[3]

Introduction

Helping consumers navigate their financial lives is central to the FCA’s strategy. Pure protection products support this by helping an individual and/or their dependants with financial commitments or lifestyle adaptations if they die or become incapacitated, injured or infirm.

In March 2025, we launched a market study into the distribution of pure protection products to consumers acting in their personal capacity. The main distribution channel for pure protection products is through intermediaries.

Interim findings

In January 2026 we published our interim findings, alongside a full report of our consumer research and 2 annexes. 

We found that, in many respects, the distribution of pure protection to consumers works well and delivers good outcomes to those that purchase it. However, some aspects of the market could work better. 

There are many consumers who would likely benefit from pure protection, but who don’t have it – the ‘protection gap’. We found that 58% of people don’t hold a pure protection product, of which 59% have never considered their protection needs.

Ahead of the final report, we will work with stakeholders to agree the work to take forward on the protection gap. We will organise workshops with stakeholders in Spring 2026.

There are also three smaller issues we also want to focus on to improve consumer outcomes in the meantime, covering:

• lower claims ratios for some protection products than others
• intermediary incentives to switch consumers unnecessarily, and
• actions intermediaries can take to improve consumers’ claims experience

We will be consulting further with stakeholders on these issues ahead of the final report.

Get involved

We want to engage with the sector to hear feedback on the findings in this report, and proposed remedies to the issues above. In particular, we’re interested to hear whether stakeholders agree:

• with our assessment of the nature and scale of harms in the pure protection sector
• that there is a protection gap that the FCA and industry should seek to reduce and what potential options should be considered
• with the findings and proposed next steps on claims ratios, incentives to switch consumers, and claims experience

We aim to publish our final report in Q3 2026 with our final findings, a summary of feedback, and next steps.

If you’d like to share your feedback in response to these findings and proposed remedies, send it to [email protected] by 31 March 2026.

Market Study – Annexes

Annex 1: Intermediated distribution, remuneration and consumer outcomes (PDF)[4] 

Annex 2: Value of pure protection (PDF)[5] 

Consumer Research: Technical Report (PDF)[6]

Spring stakeholder workshops

As described to in the interim report, we are organising a stakeholder workshop in late March to discuss the protection gap and other proposed remedies. This event aims to bring together a representative group of firms and consumer organisations. 

Industry attendees are largely being coordinated through trade associations (IFOA, ILAG, AMI, BIBA, ABI, PDG and NAFPP). Places at the workshop are necessarily limited to ensure a balanced and effective discussion. Interested stakeholders are encouraged to get in touch with their relevant trade association representative regarding participation.

If you are not represented by a trade association but would like to register your interest in attending, please contact [email protected]. 

All stakeholders are welcome to provide their feedback on our initial findings and proposed remedies by emailing [email protected] by 31 March.

We also intend to publish a short summary of the workshop discussions on which stakeholders unable to attend the event will also be able to provide input.