Adviser confidence in demand for protection products has improved heading into 2026 although rising business costs are emerging as a growing concern, according to new research from The Exeter.

The UK health and life insurer found that 37% of advisers expect demand for health insurance to increase in 2026, up from 30% who anticipated growth in 2025.

By contrast, more than one in five advisers (21%) last year expected demand to fall.

Half of advisers (50%) now expect health insurance demand to remain stable over the coming year, suggesting a more settled outlook across the market.

COST PRESSURES

Nearly four in 10 advisers writing health insurance (38%) cited the rising cost of doing business as their biggest challenge in 2026, up from 32% in 2025.

More than a quarter (28%) also highlighted pressure on consumer finances as a key concern.

Across income protection and life insurance, sentiment was similarly steady. More than half of advisers expect demand to remain stable in 2026, with around a third forecasting growth in each line.

Rising business costs were again identified as the top challenge, averaging around 36% across income protection and life insurance advisers. Affordability pressures for clients were also prominent, with around 30% pointing to financial strain as a barrier to uptake.

REGULATORY CHANGE

Just under a third (32%) of advisers highlighted regulatory change as a concern, reflecting the Financial Conduct Authority’s ongoing work, including its Pure Protection Market Study, which is expected to conclude in 2026.

Steve Bryan, director of distribution and marketing at The Exeter, said: “Advisers are facing a combination of challenges at the moment, from rising costs within their own businesses to ongoing affordability pressures for their clients, and that’s not something to underestimate.

“What’s encouraging, though, is they continue to adapt and find ways through those challenges, keeping insurance firmly on the agenda.”

BEST OUTCOMES

He added: “We’re seeing that particularly in health insurance, where confidence in demand remains high as advisers respond to ongoing concerns around access to care and treatment waiting times.

“If advisers are continuing to overcome obstacles, insurers need to ensure that we’re doing our part to back that effort and help them deliver the best outcomes for their clients.”