The FCA has joined forces with the Money and Pensions Service, The Protection Distributors’ Group and The Association of Mortgage Intermediaries, to help increase the number of consumers taking out protection insurance.
According to FCA data, 58% of adults have no life insurance, critical illness cover or income protection – and 59% of that group has never considered it.
The Money and Pensions Service and the Digital Property Market Steering Group will create a campaign aiming to prompt people to think about protection at key moments - such as becoming a parent or buying or renting 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 Association of Mortgage Intermediaries will lead work to help advisers improve how they discuss protection with their customers.
The FCA is also exploring how other partners can help put protection on people’s radar.
Graeme Reynolds, director of competition at the FCA, said: “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 campaign follows the FCA’s Pure Protection Market Study which found renters, the self-employed and gig economy workers, those on lower incomes and people with pre-existing medical conditions were disproportionately under-protected.
The report into switching, claims experiences, and fair value in the protection market generally found that competition works well in the market, but it has reminded firms of requirements and good practice under the Consumer Duty and its product governance rules.
The regulator said it was not planning new market-wide measures, but will take action where firms fall short of requirements.
James Daley, managing director of consumer group Fairer Finance said: "The Pure Protection Market study is a missed opportunity. The regulator has acknowledged many of the problems in the market - from loaded premiums to poor value offered by over 50s plans - but then concludes that no market wide action is necessary.
"While it’s great that the regulator is looking at ways to close the protection gap, and grow the market, it has missed an opportunity to iron out some of the wrinkles that have been delivering poor customer outcomes. Market studies tend to be a once in a generation event - and the question begs why this exercise was carried out at all if it was going to conclude with no real action."
Following the study, the FCA said it will also work with the Association of British Insurers to reduce delays in obtaining medical records.