The Financial Conduct Authority (FCA) has called on the insurance industry to help close the protection gap.

The FCA aims to help more consumers access products that support them and their families if they become critically ill or die.

The interim findings of its competition review of pure protection products found that, for those consumers that have taken out protection insurance, the market mostly works well.

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, the FCA found that 58% of adults do not hold a pure protection product.

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.

The FCA wants to explore what more can be done, working with industry and other stakeholders, to better support consumers.

The authority says it has seen examples of firms delivering good value for consumers and will look more closely with updated 2025 data ahead of the final report.

It will also consider ways to improve product switching, so firms make sure any switch clearly benefits the consumer and meets their needs.

FCA director of competition and interim director insurance Graeme Reynolds says: “These insurance products play a vital role in helping families manage some of the most difficult experiences in life.”

“While competition in the market is mostly working well for consumers, many more people could benefit from protection. We will work with industry to reduce this gap, to help consumers navigate their financial lives.”

The FCA welcomes feedback on its interim findings by 31 March 2026.

A final report will be published in the third quarter of 2026, setting out final findings and an update on progress.

Also commenting, Stonebridge chief executive Rob Clifford says: “Overall, the FCA rightly describes a market that is serving consumers extremely well, but the regulator is clearly concerned about the protection gap, and so are we. We welcome the FCA’s findings.”

“Most consumers don’t have any protection at all, and a large proportion of them would benefit from it.”

“For a long time now, the industry has been working hard to plug this protection gap, but there’s obviously still a lot more work to do.”

“Our firm alone has invested millions of pounds on people and technology to enable more advisers to get quality protection advice to thousands more consumers.”

“It’s a huge undertaking for the sector, and it’s fantastic that a spotlight is being shone on it here with the regulator planning to provide pragmatic help.”

“Levels of adoption won’t change overnight. It’s going to take a concerted effort from the FCA, insurers, networks and advisers to close the gap, but the FCA should be congratulated for endorsing the existing distribution model, which is already equipped to take on this challenge without major reforms.”