Too many people lack protection cover for when things go wrong, according to Sarah Pritchard, deputy CEO at the Financial Conduct Authority (FCA).
However the regulator confirmed it will be investigating income protection (IP) claims ratios and wider claims experiences before publishing it’s final report.
As part of its pure protection market study interim report, the FCA foud claims ratios from pure protection insurance products for generally among the highest when compared with general insurance.
However it noted ratios for income protection (IP) were significantly lower than the rest of the market and explored the reasons for this, but will now be conducting more work in this area.
Speaking at the Association of British Insurers (ABI) annual conference, Pritchard told delegates: “We know that too many people still lack protection for when things go wrong – 26% have no insurance at all, leaving millions exposed when life hits hardest.
“We should all be working to increase access to insurance.”
Pritchard added that the FCA’s protection market study has shown that the market is working well.
“We have seen that firms deliver good value for consumers,” Pritchard continued.
“Most claims are successful with 96% of claims accepted and £5.4bn paid out in 2024.
“Still 54% of adults don’t hold a pure protection product – even though many would benefit from one.
“That is a significant protection gap and one that we will work with you and other stakeholders to close.
“There is more to come before we conclude our work in this area.
“Assessment of income protection claims ratios, incentives for consumers, claims experience and our final report will be published later this year.”
