The FCA is working with the Association of Mortgage Intermediaries and other groups to tackle the protection gap.

A new initiative will see the regulator work with the government and key stakeholders to encourage more people to take out critical illness, life insurance and income protection.

Around 58% of adults do not hold any of these protection policies, leaving millions financially vulnerable in the event of a death in the family, serious illness or loss of income.

The Association of Mortgage Intermediaries will lead work to help advisers improve how they discuss protection with their customers.

The Money and Pensions Service and the Digital Property Market Steering Group will look at how to prompt people to consider protection at key life stages, such as when they become a parent and when they buy or rent a home.

The Protection Distributors’ Group will lead a consumer awareness campaign, targeted at groups who are less likely to take out protection products.

The work will focus on groups who are less likely to be protected, such as renters, the self-employed and gig economy workers, those on lower incomes and people with pre-existing medical conditions.

It follows the FCA’s Pure Protection Market Study.

FCA director of competition Graeme Reynolds says: “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.”

The FCA says it wants to see greater innovation in this market.

It will hold a webinar for firms to address “any misunderstandings about its rules and expectations that may be seen as barriers”.

It will also work with the Association of British Insurers to reduce delays in obtaining medical records and is inviting firms to take part in a TechSprint, encouraging them to express interest in participating by November 13.