Following the Financial Conduct Authority‘s Pure Protection Market Review on how to help close the protection gap, industry experts have shared their views on the regulator’s findings. Their comments reflect broad support for the FCA’s direction, while highlighting where proportionate change, higher standards and better evidence could strengthen the market.
Peter Hamilton, Head of Market Engagement at Zurich UK, comments:
“There will have been many in the industry anticipating the publication of the FCA Pure Protection Market Review findings this morning, like pupils waiting anxiously for exam results to arrive in their inbox. It feels like a pass, with pretty good grades.
The FCA talk positively about the wide range of products, high claims acceptance rates, low premiums, appropriate claims ratios, low complaint numbers, technical solutions to different issues and more.
They do note that there are some aspects of the market that could work better, and within that, they acknowledge the Protection gap, those who would likely benefit from pure protection, but who don’t have it. Very positively, they express a desire to work with the industry to close it. This, as they say, ‘will let more consumers access suitable financial products, making sure that any who are vulnerable or harder to insure are not left out.’”
Sam Leonard-Williams, Product Director, Market Intelligence at Defaqto:
“The FCA is right to highlight that innovation is being slowed by complexity and uncertainty. In our experience, the real barrier isn’t a lack of data, it’s that insight is often fragmented across systems, products and processes, making it harder for firms to evidence suitability, fair value and good outcomes.”
Royal London’s protection director, Carrie Johnson, comments on today’s FCA pure protection market study interim report:
The FCA’s interim report acknowledges that the distribution of protection products is broadly serving customers very well. While there are some minor areas for improvement, it’s encouraging that a key area of focus is how advisers reach a greater number of unprotected consumers to further close the protection gap.
We believe the concept of Targeted Support extending to protection could potentially be beneficial and would like to see this explored further.
We will continue to work with advisers to deliver great outcomes and the regulator and broader industry to reach more customers.”
Erika Parker, Actuarial Director at leading independent insurance consultancy Broadstone, commented:
“This is a positive report from the FCA, which finds a market that is functioning well, albeit with the potential to expand further by closing the ‘protection gap.’ It is evident that the FCA will not seek to ban products or commission in its future final report.
Better product promotion to help build consumer awareness and understanding of the value of protection products will be critical, particularly at key life events such as buying a house or having a child. A smoother sales process and innovation in payment offerings could also build product ownership.
A growing protection market will be critical to supporting the many people who rely on these insurance products to support them when they are at their most vulnerable, whether they are suffering from long-term ill health or going through a bereavement.
Separately, the FCA is expected to update the funeral plan regulation this year and could consider reinstating commission for these products.”
Tony Mudd, Third Party Products and Services Director at St. James’s Place, said:
“St. James’s Place welcomes the FCA’s interim findings, which confirm that the protection market is generally working well for consumers and that advice-led distribution delivers positive outcomes for people who actively engage with these products.
“It is encouraging that the FCA found no major systemic failures, while still identifying practical areas for improvement. In particular, we support the focus on helping customers better navigate the claims process and linking protection advice more closely with wider financial planning, including Wills and Powers of Attorney. The FCA’s emphasis on collaboration to address the UK’s long-standing “protection gap” is a positive step. Closing this gap will require coordinated action across the industry rather than quick fixes, and we fully support the FCA’s intention to work with firms to develop solutions that improve consumer understanding, access and long-term outcomes. Overall, this is a constructive and balanced assessment of the protection market and an opportunity for the industry to build on what is already working well for customers.”
Lara Maynard, Compliance & Risk Director (Protect Line) comments:
“Today’s findings are reassuring: the FCA recognises that, in many respects, protection distribution works well, but also highlights clear areas where we can do better for consumers. That’s exactly the right balance.
We welcome the FCA’s focus on closing the protection gap. As both the government and FCA see pure protection as a growth area, it is reassuring that the focus here is on helping more people understand risk and take action before life forces the conversation.
Consumer Duty is the right lens here: not just whether a policy can be sold, but whether the journey supports good decisions, fair value and long-term suitability.
We support the FCA’s intent to improve switching transparency. Switching should be the exception, not a business model, and it should be easy to evidence the customer benefit every time.
The interim report is clear that sweeping interventions like banning or capping commissions aren’t on the table at this stage. That’s sensible; the priority should be proportionate changes that improve outcomes without reducing access.
Where the FCA is asking the market to raise its game, like clearer metrics and stronger governance around switching, we’re supportive. Good firms should welcome higher standards.
We also welcome the emphasis on improving the claims experience, not just the point of sale. Practical support that helps families when it matters most is a powerful measure of quality.
If there are data gaps, let’s fix them. Better, consistent reporting helps everyone: regulators, insurers, intermediaries, and most importantly, customers.
This is a moment for industry collaboration. Regulators can set direction, but meaningful progress will come from firms taking ownership and sharing what works.”
Chris Reed, Growth Director (Protect Line) comments:
“For me, the headline is simple: there’s a big protection gap, and the biggest driver is that people aren’t prompted to consider protection until it’s too late. That’s a growth challenge, and a responsibility.
The next phase of protection growth will come from meeting customers at the right life moments, such as mortgages, new families, career changes, and making it genuinely easy to understand and act.
This report validates what modern distribution should look like: less friction, clearer comparisons, better education, and a journey that builds confidence, not confusion.
If we want more families protected, we need to make the benefits tangible. Claims paid and real customer outcomes should be front-and-centre, not buried. This is something we can and should come together as an industry to address.
We’d love to see industry lean into innovation that improves access, especially for people who feel underserved today, like the self-employed or those with more complex medical histories.”
James Daley, managing director of consumer group Fairer Finance, said:
“The FCA’s protection market study is another missed opportunity. Many of the issues in the market have been side-stepped, and once again, the main headline from the interim report is that the FCA is not planning any major action. The Government’s pro-growth, deregulation agenda continues to make all the running, with the FCA clearly feeling it cannot take any action which is seen to be unpopular with industry.
It’s incredibly frustrating that the regulator has invested so much time and energy in both the protection and premium finance market studies, only to conclude that no action is necessary. These market studies were launched because of concerns about the way these markets were operating, yet the regulator has felt unable to follow through and take any action to address those problems.”
Debbie Kennedy, CEO of LifeSearch, said:
“This is a positive and constructive Interim Report from the FCA that gives the pure protection industry confidence to move forward, building on strong foundations already in place. We welcome the FCA’s recognition of the vital role of intermediaries and advice, and we value the close engagement with the FCA throughout this process to build shared understanding and practical solutions. LifeSearch remains fully committed to continuing that dialogue.
We are particularly encouraged that the commission model is recognised as an important mechanism for helping to close the UK’s protection gap and for delivering positive customer outcomes. The protection gap remains a priority challenge for the industry and will require innovative, scalable solutions. The report’s recognition of ‘hybrid digital-advised distribution models’ reflects an approach LifeSearch has championed for many years. This is also why we have developed our partnership model – to meet consumers where they already are, whether through building societies, price comparison websites or trusted consumer brands, making protection more accessible to those who need it most, and they’re not left behind.
We also welcome the FCA’s focus on the claims experience and the value intermediaries can bring. At LifeSearch, our purpose is to protect people properly, which means supporting customers beyond policy purchase. This includes ongoing engagement through digital channels, timely reviews, access to human advice, and practical education, including helping customers place life insurance into trust, so the right money reaches the right people at the right time, avoiding unnecessary delays and potential tax exposure.
We look forward to continuing to contribute to the next stages of the Market Study and to working collaboratively with the FCA and industry partners to strengthen consumer outcomes and help close the protection gap.”
