On 29 January 2026, the UK’s FCA published the interim report of its market study into the distribution of pure protection products to retail customers (MS24/1: Market study), alongside related outputs including Annex 1: Intermediated distribution, remuneration and consumer outcomes, MS24/1.4: Market study into the distribution of pure protection products to retail customers – interim report and the Pure Protection Market Study: Consumer Research Report – January 2026 undertaken by The Big Window. The interim findings and consumer evidence together provide rich insight into how intermediated distribution, remuneration structures and consumer experiences interact in the pure protection market and where outcomes could be strengthened.
- The Central Role of Intermediated Distribution
Both the interim report (MS24/1.4) and Annex 1 underscore that intermediaries dominate the distribution of pure protection products. Approximately 80% of policies are sold via intermediaries, reflecting a consumer market that is largely passive: many individuals do not actively seek protection products and rely on advisers to raise awareness.
The interim report highlights that intermediaries often introduce products at key life events, buying a home, starting a family, or changing employment status, which aligns with consumer research showing that life events and adviser recommendations are the main triggers for purchasing protection. Without intermediaries, a significant portion of consumers would likely remain unprotected, contributing to the persistent “protection gap” identified in the interim report: 58% of adults do not hold a pure protection product, and 59% of these have never considered their protection needs.
- Remuneration Structures and Their Impact on Consumer Outcomes
Annex 1 specifically examines intermediary remuneration and its influence on consumer outcomes. The FCA found that commission-based models generally do not result in poorer pricing for consumers on average, but potential misalignment exists. For example, advisers may have incentives to encourage switching policies after commission clawback periods, which could conflict with long-term consumer interests.
The interim report (MS24/1.4) emphasizes that while harmful switching is currently low, more robust data collection and monitoring are needed to prevent intermediary incentives from undermining consumer outcomes.
Consumer research reinforces this point: when advisers actively discuss needs and options, consumers report higher confidence in product choice and value. Conversely, those without adviser engagement often misunderstand product benefits or fail to act at all, demonstrating the interplay between remuneration, adviser behaviour, and consumer experience.
- Claims Experiences and Consumer Outcomes
MS24/1.4 notes that claims outcomes remain broadly positive, with high acceptance rates (98%) and relatively low complaints. Annex 1 further highlights that intermediaries can enhance claims experiences by guiding customers through practical steps such as naming beneficiaries, placing policies in trust, and ensuring documentation is correctly completed.
Consumer research indicates that this support increases satisfaction and reduces stress at the claims stage, showing how effective intermediated distribution directly benefits consumer outcomes.
- Awareness, Engagement, and the Protection Gap
A major theme across the interim report and Annex 1 is the protection gap. Many adults remain unaware of their need for protection or perceive it as unaffordable. The Consumer Research Report (Jan 2026) illustrates that non-holders often never consider protection unless prompted by an intermediary.
For example, nearly half of non-holders in the research had never thought about purchasing protection, suggesting that intermediated distribution is not only about selling products but also educating and prompting consumer action.
- Focus Areas Ahead of the Final Report
MS24/1.4 identifies several areas for further consideration and potential regulatory focus:
- Closing the protection gap: Targeted engagement strategies, particularly at life events, to increase awareness and adoption.
- Aligning remuneration with consumer interests: Monitoring and mitigating incentives that could lead to unnecessary switching.
- Enhancing claims experience and consumer understanding: Advisers can play a critical role in supporting consumers throughout the product lifecycle.
Consumer research underscores that well-informed consumers benefit from both intermediary guidance and clear, accessible product information, reinforcing that distribution and remuneration practices are central to achieving positive outcomes.
Conclusion
The combination of Annex 1, the MS24/1.4 interim report, and the January 2026 consumer research paints a comprehensive picture: intermediated distribution is critical to reaching consumers, adviser remuneration must be carefully managed to align with consumer interests, and awareness/engagement gaps remain significant.
As the FCA progresses toward its final report in 2026, these insights provide a roadmap for improving consumer outcomes, closing the protection gap, and ensuring that the pure protection market works effectively for retail customers.
How Complyport Can Help?
At Complyport, we help firms manage evolving regulatory reporting requirements by:
- Regulatory Engagement and Market Study Readiness: We help firms respond effectively to FCA market studies, including MS24/1.4 and related Annex reports, by preparing board briefings, regulatory submissions, and responses to FCA calls for input. Our expertise ensures firms can demonstrate proactive risk management, compliance with distribution and remuneration rules, and alignment with FCA expectations around consumer outcomes in protection products.
- SM&CR and Intermediary Accountability Frameworks: Complyport assists in clarifying senior management responsibilities for the oversight of intermediated sales channels, adviser remuneration, and distribution practices. We help embed accountability frameworks so that decision-making, challenge, and oversight are clearly documented, ensuring the firm can evidence that adviser incentives and practices support fair treatment of consumers and reduce conduct risks.
- Distribution Governance, Risk Assessments, and Consumer Outcomes: We conduct gap analyses of distribution and remuneration frameworks, assessing alignment with FCA expectations and MS24/1.4 findings. This includes reviewing adviser remuneration, product governance, and claims support processes. We help implement proportionate governance structures, controls, and documentation that enhance consumer outcomes, address protection gaps, and ensure compliance with conduct, operational, and oversight requirements.
- Consumer Engagement and Remediation Support: Building on insights from the Consumer Research Report (Jan 2026), we advise firms on strategies to improve customer engagement, awareness, and understanding of protection products. This includes supporting interventions to enhance claims experiences, ensure appropriate coverage, and strengthen intermediary communications, all while evidencing fair and positive consumer outcomes to regulators.
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