It's been described as a "saviour" … and advisers are becoming more proactive
It’s been described as a “saviour” for mortgage brokers in challenging times – and, certainly, a new keynote report finds that advisers are playing a greater role in protection sales.
The study, from the Association of Mortgage Intermediaries (AMI), reports that 65% of advisers are proactively maintaining cover for their clients - up 5% on a year ago.
AMI’s findings suggest a positive trend among brokers engaging with their existing customers about their insurance needs. Some 83% of advisers see it as their role to encourage regular reviews with customers and over half, 56%, are conducting frequent catch-ups with them. Furthermore, 44% have seen improvements in customer retention as a result.
Many mortgage professionals have turned to protection to boost their income in leaner times, of course.
Malcolm Guest, managing director of Source Insurance - a whole-of-market general insurance quotation platform for mortgage brokers and independent financial advisers - has seen its value during his 40-year career.
“The mortgage market was quite freestyle pre-regulation, and the period leading up to the financial crisis of 2008 onwards, frenetic,” Guest (pictured left) previously told Mortgage Introducer. “As we navigated the fallout from Lehman Brothers, mortgage brokers did face an existential threat. One CEO of a large mortgage network told me that their general insurance business was their saviour during this challenging period.”
He urged brokers: “Focus on ancillary products to supplement your income, make GI an early priority - and a good annual check-in.”
How do mortgage advisers and consumers view protection?
AMI’s research involved 3,000 UK adults and 308 advisers. Younger consumers, particularly Gen Z (27%) and Millennials (24%), expect brokers to prompt protection reviews, it finds.
Robert Sinclair (pictured second from left), chief executive of AMI, commented: “This year's report underscores the growing role advisers play in keeping protection policies active, with more clients benefitting from regular reviews and tailored advice.”
Sinclair acknowledged that the data highlights areas where the industry can improve. Some 28% of advisers reported a decline in underwriting services and 16% of those surveyed observed worsening service levels in claims handling.
“By addressing these gaps and enhancing communication, we can ensure more consumers are protected when they need it most,” Sinclair said. “It’s important not to lose sight of our ongoing mission, to ensure UK consumers receive appropriate protection advice every day.”
David Hollingworth, director at broker L&C Mortgages, is meanwhile encouraged that younger customers see the importance of protection and that advisers increasingly see the benefit of client conversations in this area.
“There is clearly more to do though to help customers better understand the importance and value of protection,” noted Hollingworth (pictured second from right). “It’s so important to make sure we are educating and protecting as many of our customers as possible.
“Consumer expectations around protection insurance timelines reveal a significant gap between perception and reality, particularly for cases involving complex health needs. The data shows that while 17% of consumers expect a protection policy to be ready within 48 hours, for those with complex conditions the actual process often takes longer when medical evidence is required.
“This creates a challenge for aligning protection policies with mortgage timelines, whether it’s a new purchaser or a remortgage customer, each bringing their own set of needs and priorities. Digital solutions could represent a meaningful improvement in streamlining the process.”
Read more: How successful is Consumer Duty, one year on?
How much of an opportunity does protection offer advisers?
For Louise Pengelly, director of proposition at insurance administrator and distributor, Paymentshield, it is heartening to see evidence of advisers interacting with customers, and aligning with the aim of Consumer Duty to improve their outcomes.
“With AMI’s research showing that only 22% of consumers believe it's the adviser's responsibility to initiate these reviews, there's a clear opportunity for advisers to exceed expectations and add further value here,” commented Pengelly (pictured right).
“We envision a future where advisers, no matter what type of protection they’re providing, can seamlessly blend offering direct advice with referral strategies, increasingly leveraging the wide range of options at their disposal to deliver a brilliant customer experience."
Following its research, AMI has devised four action points to help advisers and insurers build more understanding and empathy with clients and potential clients.
Firstly, it advises taking time to understand personal circumstances and situations before explaining products. Secondly, it believes that products should be easy and accessible, avoiding jargon. Thirdly, AMI recommends that clients should be allowed to feel in control, given time to think about products, research them and ask additional questions, and, fourthly, brokers should highlight how insurance cover can provide help in the worst situations, sharing examples of this and reassuring clients that they have real value.
