The Nationwide House Price Index found that, at 0.5%, annual house price growth remained below 1% for the seventh consecutive month in June.
With a slightly subdued housing market now is the time for mortgage brokers to ensure they sell home insurance to make up their lost income, general insurance firms have argued.
The Nationwide House Price Index found that, at 0.5%, annual house price growth remained below 1% for the seventh consecutive month in June. And also in June prime central London transactions dropped by 13% year-on-year, according to LCPAca Resi Index.
Geoff Hall (pictured), chairman of Berkeley Alexander Insurance Services, said that whenever the mortgage market takes a hit, brokers find income elsewhere from general insurance.
He said: “Brexit and its impact on the property market will have a big bearing on general insurance in this sector.
“But home insurance is home insurance. There are many millions of properties in the UK, most of which need home insurance, and will still need it. GI as a product won’t change a great deal in that respect.
“What we’ve found in the past and will be true in the future too is whenever the mortgage market takes a hit, general insurance sales increase because mortgage brokers need to replace their income.
“They have a little bit more time on their hands because they don’t have as many mortgages because their aren’t as many people moving house. And they need to replace the income on the loss on the value of the mortgages.
“Every time we see a hit on the mortgage market we see an increase in GI penetration,but then we see it decline when advisers start getting busy on mortgages again, saying ‘I’m too busy on mortgages, I don’t have time for GI’ but that GI saved their businesses.”
Hall recommended small brokerages with a few advisers to hire someone for GI only because they would end up covering the cost and start making money.
RobEvans, chief executive at Paymentshield, agreed with this model and said that now is the time for advisers to adopt this approach.
He added: “Brokers are being hit with a triple threat of low transaction volumes, more borrowers choosing a product transfer at the end of their term and more clients on 5-year fixed rates, reducing the frequency of remortgage business.
“In this environment, the recurring income provided by general insurance becomes even more important for adviser firms. It can even be beneficial for firms to employ a general insurance specialist as a way of increasing their volumes.
“Our sales team work closely with advisers to show how they can integrate general insurance into their business and how, over a matter of months, the revenue generated more than offsets the cost of the extra headcount."
Lisa Martin, development director at TMA Club, said that selling general insurance and protection brings repeat business.
She said: “The opportunity is huge. On the broker perspective it adds value. It adds revenueandrepeat business.
“GI is another way of protecting the customer and another conversation piece to keep the customer. It comes back to the advice and speaking to people. And the same for protection with an opportunity to revisit customers with protection.
“It’s up to the advisers to use that opportunity as touchpoints with customers for GI and protection.”
