The Financial Conduct Authority (FCA) is teaming with industry, government and consumer groups to encourage more people to consider protection insurance, after finding that around 58% of UK adults have no life insurance, critical illness cover or income protection.

The FCA said 59% of those without protection had never considered taking it out, potentially leaving millions vulnerable following a death in the family, serious illness or loss of income.

The new initiative will focus particularly on groups that are disproportionately unprotected, including renters, self-employed and gig economy workers, lower-income households and people with pre-existing medical conditions.

The Money and Pensions Service and Digital Property Market Steering Group will explore ways to prompt consumers to consider protection at key financial milestones, such as becoming a parent or buying or renting a home.

The Protection Distributors' Group will lead a consumer awareness campaign, while the Association of Mortgage Intermediaries will work to improve how advisers discuss protection with customers.

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 initiative follows the FCA’s Pure Protection Market Study, which found that competition generally works well in the market. The regulator said it is not planning new market-wide measures but reminded firms of their obligations under the Consumer Duty and product governance rules, and said it would take action where firms fail to meet requirements.

The FCA also wants greater innovation in the sector and will work with the Association of British Insurers to reduce delays in obtaining medical records. It is inviting firms to participate in a TechSprint and will hold a webinar to address potential misunderstandings around its rules and expectations.

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