Written by Jamie Leong, Team Lead, Walsham Brothers
A single letter change could transform consumer understanding, strengthen industry credibility and help close the protection gap. Here’s why renaming Accident, Sickness and Unemployment cover to Accident, Sickness and Redundancy is an idea whose time has come.
After all redundancy is the risk and redundancy is the reality. So why does the label still say unemployment?
Words matter. In insurance, they can be the difference between a consumer who understands what they are buying and one who does not, and under the FCA’s Consumer Duty responsibilities, that distinction carries real regulatory weight. Yet when it comes to protection conversations either with our industry peers or with our clients, the market continues to use a term and acronym that is both technically misleading and practically inaccurate. It is time to change Accident, Sickness and Unemployment (ASU) to Accident, Sickness and Redundancy (ASR).
The case I put to you is straightforward. ASU policies do not cover voluntary resignation, career breaks or retirement. They do not pay out if someone is simply “unemployed” in the everyday sense of the word. They respond specifically and exclusively to involuntary job loss — redundancy. Yet the word on the tin says unemployment. This is not a minor semantic quibble. It is a meaningful mismatch between product name and product reality, and it matters enormously in a market where consumer trust and product clarity are under increasing regulatory scrutiny.
I speak from experience. When we launched Walsham Brothers’s own income protection product, the label ASU felt like the natural and familiar choice, the industry standard that advisers and distributors recognised. We were also conscious that calling it ASR felt like a step too far from convention, despite it being the more accurate description of what the product actually does. Our caution reflected the restraints and inertia of the market rather than the interests of the consumer, and this article is in part our acknowledgment of that.
Consumer Duty and Clear Messaging
The FCA’s Consumer Duty has been in force for almost three years now, and it places a clear obligation on firms and advisers to ensure that their products and communications deliver good outcomes for policyholders. One of its core requirements is that consumers should be able to understand what they are buying without the need of having to understand any technical jargon. The current ASU label arguably works against that principle from the very first point of consumer contact. A product named for unemployment could reasonably be assumed to pay out any time that someone is out of work, which we know it does not. Renaming it ASR would immediately and honestly signal the trigger event. It would reduce mis-selling risk, improve informed consent and align product naming with the FCA’s expectation of clarity throughout the customer journey.
The insurance industry has faced sustained criticism for complexity and opacity. The shift from ASU to ASR is a rare opportunity to lead on consumer messaging and clarity without waiting for a regulatory directive. It is the kind of proactive, good-faith change that regulators notice and reward.
Firms must act to deliver good outcomes for retail customers. Products must be designed to meet consumer needs, communicated clearly, and sold in a way that enables customers to make informed decisions. A product name that systematically overstates coverage breadth, however unintentionally, sits awkwardly alongside these obligations.
The Data Makes the Case
The economic backdrop gives the ASR argument added urgency in 2026. The UK unemployment rate has risen to 5.2% in the three months to January 2026, its highest level since February 2021 with 1.87 million people now out of work, an increase of 323,000 over the previous year. Redundancy notifications are rising too, up year-on-year according to ONS data. These are not abstract statistics. They represent households facing the exact scenario that ASU (or rather ASR) is designed to protect against.
Sources: ONS Labour Market Overview (March 2026); ONS Sickness Absence in the UK Labour Market 2024
Source: ONS / House of Commons Library, March 2026
The picture is equally compelling if we look at sickness in the workplace. In 2024, an estimated 148.9 million working days were lost to sickness or injury in the UK, equivalent to 4.4 days per worker. While this represents a modest fall from the post-pandemic high of 163.8 million days in 2023, it remains nearly 10 million days above pre-pandemic levels. Mental health concerns and musculoskeletal problems continue to be the leading causes of long-term absence. The ‘A’ and ‘S’ in ASR are working as hard as ever.
Looking Ahead – ASR in 2026
The outlook and likely demand for ASR in 2026 is compelling. The UK economy grew by just 0.1% in Q4 2025, sluggish by any measure and businesses continue to face rising employment costs, including higher National Insurance contributions and an 8.5% increase in the National Minimum Wage from April 2026. Vacancy levels have fallen to below pre-pandemic levels. The combination of a cooling labour market, elevated unemployment, elevated sickness absence and economic uncertainty creates precisely the conditions in which income protection products should be front of mind for consumers. And who knows what our friends across the pond might do next.
Yet the protection gap, that yawning chasm between those who could benefit from protection and those who actually hold it, remains vast. The FCA’s Pure Protection Market Study interim findings, found that 58% of adults do not hold a pure protection product, and of those, 59% have never even considered their protection needs. While ASU was placed outside the scope of that study, the principle is identical; millions of working people are financially exposed to the very risks that this product is designed to address.
The FCA’s final report is not expected until Q3 2026, but it is understood that it is considering extending targeted support into the protection space, alongside awareness campaigns and stakeholder workshops. This is a pivotal moment for the industry. As the regulator turns its attention to closing the protection gap, both protection advisers and ASR providers have an opportunity to be on the right side of the story.
Of course the name change from ASU to ASR alone will not close the gap. But it will remove one more reason for consumer confusion, one more barrier to engagement, and hopefully no more “I thought it covered me” conversations. Redundancy is a lived fear for millions of UK workers, particularly those whose income might be the only source of financial stability or support for an entire household. A product that clearly names and addresses that fear honestly, that says clearly “we are here if you lose your job involuntarily”, has a stronger emotional and practical resonance than one hiding behind a technically imprecise acronym.
The Call to Action
The insurance industry moves slowly on naming conventions, which is understandable. Legacy systems, documentation, training materials and distributor processes all carry inertia. But the Consumer Duty has changed the calculus. The question is no longer “does the current name cause active harm?” but rather “does it deliver the best possible outcome for consumers?” On that test, ASU falls short, and ASR passes with ease.
2026 could and should be the year the industry makes this call. The economic data supports it. The regulatory direction of travel supports it. Consumer clarity demands it. Let us rename this product for what it actually does and in doing so, take one confident step forward toward a protection market that finally works for everyone.
Please contact the Income Protection Task Force (“IPTF”) at [email protected] or me directly at [email protected] to discuss how we make this happen – because only through inclusion and collaboration can there be smooth transitional change.
Sources:
- ONS Labour Market Overview, March 2026, UK unemployment rate 5.2% (Nov 2025–Jan 2026).
- House of Commons Library, Labour Market Statistics, March 2026, 1.87 million unemployed, up 323,000 year-on-year.
- ONS Sickness Absence in the UK Labour Market: 2023 and 2024, June 2025, 148.9 million days lost; 4.4 days per worker.
- FCA Pure Protection Market Study MS24/1, Interim Report, January 2026.
- House of Commons Library, February 2026 Economic Update, GDP growth 0.1% in Q4 2025.
