The UK protection industry stands at a pivotal moment , with the Financial Conduct Authority ( FCA ) set to launch its Pure Protection Market Study . 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 Market Study
The FCA ' s Pure Protection Market Study aims to scrutinise how effectively pure protection products — such as life insurance , critical illness cover , and income protection — meet customer needs . We expect it to focus 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 :
1 . Customer Education and Awareness : Asia ’ s Approach
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 .
2 . Value-Added Services : A U . S . Focus
In the United States , 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 market study 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 .
3 . Behavioural Insights : Australia ’ s Retention Model
Australia ' s protection market has successfully leveraged behavioural insights to improve retention rates . Many insurers use data analytics to identify patterns associated with cancellations and proactively intervene . For example , they might flag policies at risk of lapsing and implement targeted outreach campaigns to address customer concerns or offer flexible payment options .
The UK could benefit from adopting a similar datadriven approach . By integrating advanced analytics into customer retention strategies , insurers can proactively address pain points and build stronger , more enduring relationships with policyholders .
February 2025 | 5