We have launched a market study into the distribution of pure protection products to retail consumers.
Read the Terms of Reference (PDF)
Read the market overview (PDF)
We have published a summary of our quantitative consumer research findings.
Our consumer research was undertaken by The Big Window following a competitive tender process. It looks into consumers’ perceptions and experiences of buying, holding and claiming on pure protection products.
This research is one element of our market study. We have evaluated it in combination with other evidence collected over the course of the market study to inform our interim findings.
We will combine these quantitative findings with our qualitative research and publish them in a full consumer research report alongside our interim report.
We expect to publish our interim report at the beginning of 2026.
Pure protection products are designed to help an individual, and/or their dependents, with existing financial commitments or lifestyle adaptations if the policyholder dies or becomes incapacitated, injured or infirm. They include term assurance, critical illness cover, income protection insurance, and whole of life insurance including both underwritten whole of life insurance and guaranteed acceptance over 50s plans.
Pure protection products are important. Consumers rely on them to provide financial resilience, often when particularly vulnerable. In 2023, approximately £4.85bn was paid out in pure protection claims on individual policies, aiding those affected by bereavement, illness, and injury.
The main distribution channel for pure protection products is through intermediaries, both on advised and non-advised bases. This approach can be cost-effective for insurers and allows consumers to benefit from intermediaries’ expertise and market access.
We have launched a market study into the distribution of pure protection products to consumers acting in their personal capacity. We are examining whether the distribution of pure protection products works well against our operational objectives, including whether competition works in the interest of consumers. If the distribution of pure protection products is working well, consumers should be able, for example, to buy products and services that meet their needs, provide fair value, and support them in making timely, well-informed decisions.
We observe positive indicators in pure protection, including a relatively low number of complaints received by the Financial Ombudsman and, according to published Association of British Insurers (ABI) data, over 95% of new consumer claims being paid out on some products (eg term assurance).
There are also indications that distribution of pure protection products may not be fully effective. We are examining the incentives created by commission structures, competitive constraints on insurers and intermediaries, and the influence of other market participants (such as re-insurers, portals, research firms and lead generators) on distribution. We are also exploring any potential barriers to innovation and investment.
We will also assess whether the consumer outcomes that we observe align with those expected under the Consumer Duty and/or our PROD rules. Concerns include unnecessary consumer switching driven by intermediaries, commission practices that may not represent fair value (eg raising premiums to pay an intermediary higher commission), and fair value issues with some products (eg guaranteed acceptance over 50s insurance). Some studies also suggest a substantial protection gap in pure protection products.
Our Terms of Reference set out why we are doing the market study, its scope, the key issues we are exploring, the potential outcomes that our work might lead to, and our next steps.
Following a pilot, we issued requests for information (RFI) to a sample of around 30 insurers and intermediaries.
We asked firms to provide information about sales, their distribution strategy, commissions, the nature of competition, and consumer outcomes. We have used the information to examine many of the concerns listed in our terms of reference.
In September 2025, we published a market overview paper, setting out a factual description of the structure of the UK pure protection market for retail customers.
We published a summary of our quantitative consumer research in December 2025.
We will publish an interim report setting out our initial findings and proposed next steps at the beginning of 2026.
If the distribution of pure protection products is not working well against our operational objectives, including our competition objective, we will consider whether any changes are needed to improve consumer outcomes. This is in particular to support competition that delivers innovation and investment and to make sure the market works well for consumers.
Market studies are forward-looking and do not set out to examine past conduct of individual firms or establish the basis for redress.
We will publish the full report on our consumer research at the same time as the interim report.
After the interim report, on which we will consult, we will continue to engage with the sector to explain our findings and listen to feedback.
If you want to get in touch with us about the market study, please contact [email protected].
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