E-Learning Login
Compliance Portal
January 29, 2026
The FCA has updated its Pure Protection Market Study web page to announce the publication of its interim report. The report is accompanied by a full report on the consumer research, a consumer research technical report, and 2 annexes (Annex 1: Intermediated distribution, remuneration and consumer outcomes, and Annex 2: Value of Protection). The nature of the finings in relation to the take-up of long term insurance by UK consumers has driven the FCA to call for ‘help to close the protection gap’.
The main interim findings:
- The main distribution channel for pure protection products is through intermediaries (80% of sales in 2024), with a wide range of intermediary models. Intermediary commission revenue has remained broadly stable, while commission rates have increased slightly.
- In many respects, the distribution of pure protection to consumers works well and delivers good outcomes to those that purchase it. There are a wide range of products, most consumers can claim when they need to, and the costs of cover have remained stable in the last few years. However, some aspects of the market could work better:
- lower claims ratios for some protection products than others;
- intermediary incentives to switch consumers unnecessarily (the FCA will also consider ways to improve product switching, so firms make sure any switch clearly benefits the consumer and meets their needs); and
- actions intermediaries can take to improve consumers’ claims experience.
- The FCA will be consulting further with stakeholders on these issues ahead of the final report.
- 58% of people don’t hold a pure protection product, of which 59% have never considered their protection needs. This is what the FCA is referring to as the ‘protection gap’. Research suggests that the gap exists because consumers aren't aware of their needs and aren't prompted to consider them. Other issues include ability to pay, misunderstandings about the product or improvements needed in the sales process.
- There is significant data contained in the Consumer Research Technical Report and in Annex 1 to the main report.
The FCA wants to engage with the sector to hear feedback on the findings in this report, and proposed remedies to the issues above. In particular, the FCA is interested to hear whether stakeholders agree:
- with its 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; and
- with the findings and proposed next steps on claims ratios, incentives to switch consumers, and claims experience.
The FCA aims to publish its final report in Q3 2026 with its 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 by 31st March 2026.
ICS receives queries related to product distribution under Consumer Duty on a weekly basis, so please contact us on .
