The UK protection industry stands at a pivotal moment, with the Financial Conduct Authority( FCA) set to launch its Pure Protection Survey. This initiative offers a unique opportunity to assess how well the industry is serving customers while identifying areas for improvement. By benchmarking against other markets, the UK protection industry can glean valuable lessons to elevate customer engagement, enhance product design, and address persistency challenges.
Understanding the FCA Pure Protection Survey
The FCA ' s Pure Protection Survey aims to scrutinise how effectively pure protection products— such as life insurance, critical illness cover, and income protection— meet customer needs. It focuses on several key areas, including sales practices, product suitability, claims processes, and retention strategies. While the UK market has made significant strides, challenges persist, such as high cancellation rates, limited consumer understanding, and a gap in awareness of value-added benefits. These areas align with global challenges in the protection sector, making it essential to examine how other markets are addressing them.
Lessons from international markets
Several global markets have adopted innovative practices that the UK can adapt to strengthen its protection industry. Below are some key lessons from leading markets:
Asia’ s approach: Customer education and awareness
In markets such as Japan and Singapore, insurers invest heavily in consumer education to demystify protection products. Campaigns often use simple, relatable language to explain the importance of life and health insurance, fostering trust and increasing penetration rates.
The UK can adopt similar strategies to bridge the knowledge gap. By using clear, jargon-free communication and leveraging digital tools like webinars, explainer videos, and interactive tools, insurers can empower consumers to make informed decisions. Additionally, promoting the long-term value of protection— beyond a mere transactional relationship— can drive greater engagement.
A US focus: Value-added services
In the US, insurers often incorporate value-added services such as wellness programs, telemedicine, and mental health support into their protection products. These services provide tangible day-to-day benefits, increasing perceived value and fostering customer loyalty.
The UK protection industry has already made strides in this area, but the FCA survey presents an opportunity to evaluate whether these offerings are resonating with customers. By expanding value-added services and tailoring them to specific demographics, UK insurers can differentiate themselves while addressing persistency issues.
April 2025 | 5