Protection is unlikely to join the national employment savings trust (NEST) project following a meeting between Government representatives and counterparts from the group risk industry.
The meeting also produced a call to arms for the industry and prompted three suggestions that could provide a solution to the protection gap - one that could save the government £4bn.
An executive summary from the session, published by hosting trade body Group Risk Development (Grid), indicates that being added into the present NEST system is highly improbable.
"Given the scale of the protection gap currently being experienced in the UK and the many parallels with the pensions, the temptation to consider whether NEST could be adapted to meet these needs is compelling," it says.
"Could automatic enrolment and NEST provide a similar catch all solution for the UK? For a number of reasons, the answer is probably no."
And although there is recognition of a need for action there are several key differences between the pensions and protection sector that limit the potential changes.
"Rightly or wrongly, protection issues are currently lower down the political agenda than those facing the pensions market and so it's harder to reach the consensus needed to implement a NEST like solution in this space," it adds.
"While protection gap statistics are huge, they are perceived as an industry construct and people can't interpret what they actually mean for them, while the State also appears to view the protection issue differently from retirement undersaving.
"The problem is that life cover revolves around safeguarding against a catastrophic event which happens to relatively few people," it adds.
Early intervention on sickness absence is one element from the protection sector which has a more significant profile, however it is protection's dealing with varying levels of risk, not the near inevitability of retirement, that proves the major hurdle.
The report concludes by issuing a rallying cry to the industry to make the risks of inadequate protection real and tangible.
"The only way to achieve this would be to galvanise the industry, employers, stakeholders and government with a view to eroding the protection gap once and for all," it says.
"Clearly, the Consumer Financial Education Body could play a pivotal role here and if employees better understand the value of protection benefits, more peer pressure within employer sectors may help to drive this.
"Time will tell if the appetite for such dialogue is there," it adds.
The panel, formed by the Department for Work and Pensions, Association of British Insurers, intermediary Towers Watson, reinsurers and consultants, suggested three alternative routes:
• National protection specific auto-enrolment similar to the Australian model, although the report notes this would require a huge sea change for a country still used to relying on the State;
• Worksite marketing model where employees are given the opportunity to purchase financial products direct from providers, a process that is already popular in the USA;
• Tax incentives to employers to provide group risk benefits, something that its estimated could save the DWP almost £4bn.
Katharine Moxham, spokesperson for Grid believes the government needs to focus greater attention on the protection gap if it is to succeed in it goals of reducing the welfare state demands.
"In the pensions space, the saving gap is well appreciated by government and policy makers," she says.
"Yet, understanding of the UK protection gap lags behind and it has yet to make it up the policy agenda.
"Considering the societal and financial pressure lack of adequate protection exerts, this seems an oversight," she adds.
