What have we learnt about evolution in the legal expenses insurance market from the latest FCA fair value measures data?

Sadly, it seems that little if anything has changed.

The Financial Conduct Authority (FCA) data reveals that claims frequency for personal before the event (BTE) legal expenses insurance remains at 0.30% (the same level as in 2022 and 2023). Interestingly, add-on Guaranteed Asset Protection (GAP) insurance, which saw regulatory intervention in 2024, has a frequency rate of 0.6% (0.50% in 2023). We also saw a drop in the BTE claims acceptance rate from 56.5% in 2023 to 50.7% in the latest data. Could we see the FCA fair value spotlight turning towards the traditional legal expenses providers?

The FCA fair value data points to the need for providers to take a long hard look at their products - are they meeting a real customer need and can they stand up to the scrutiny of the Regulator focused on fair value?

However, rather than driving change, the mounting challenges traditional providers face is resulting in capacity withdrawal, reduced product appetite, and cover options.

Innovation is possible in this valuable but misunderstood market. When current cover focuses on areas of litigious litigation i.e. disputes , it is time to move beyond the focus on litigious issues and look to supporting customers in the more day-to-day areas of legal support such as estate planning, matrimonial matters, and conveyancing.

Addept Insurance launched to directly address gaps and areas of unmet need in existing products. We see opportunities to address these areas in the traditional legal expenses market. Follow us to find out more about our plans.