Mortgage Introducer December 2021

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Protection is back on the mortgage agenda Kevin Carr Xxxxxxxxxx chief executive, Protection xxxxxxxxxxxxxxxx, Review, and MD, Carr xxxxxxxxxxxxxxxx Communications


arlier this month, the Association of Mortgage Introducers released Protection: Moving forward its second annual report into the protection market. By asking 5,000 consumers and more than 250 mortgage and protection advisers a range of detailed questions, AMI has produced a hugely informative report, which gives the industry as a whole unique insight into how protection is viewed and valued. From an industry point of view, there were some real positives to be taken from the results, for example, more than half of advisers said they had seen protection discussions with their clients increase, almost half said their clients are more open to discussing protection than they were a year ago, while one in four are now referring to a protection specialist, up from one in seven last year. While this is certainly encouraging, the report also discovered a widening

gap between the messages advisers think they are conveying about protection and what is actually being heard. When asked if they raise the subject of protection with their clients, 99% of the advisers surveyed said yes, yet almost two thirds of consumers say they don’t remember discussing it at all. This is perhaps why only a quarter of mortgage customers who used a broker have ever bought any protection products from them. LACK OF COMMUNICATION

The most common reason why respondents say they haven’t bought protection from their broker is not cost - it is because they didn’t think they needed the products, while two in five think brokers only raise protection to increase their commission. However, the data suggests this scepticism is more about a lack of communication than distrust of brokers motivations, as half (47%) say they would change this view if their adviser was to take more time to talk about protection, why they think it is important and explain how protection products could help them and their families. And this theme of better communication is one that runs through this report, with much of

Facts and figures   1 in 4 (25%) advisers are now passing protection business to a specialist, up from 1 in 7 (14%) last year    57% of advisers say protection discussions with clients have increased in the past 12 months and 42% say their clients are now more open to discussing protection   18% would consider Income Protection as a result of Covid-19 when they wouldn’t have before, rising to 40% of 18-34s   99% of mortgage advisers say they raise


protection with their clients, but 64% of consumers don’t remember discussing it   42% of consumers think advisers only bring up protection to increase their commission but half (47%) would change their view if:  their adviser took more time to talk about it (14%)  explained why they felt a protection discussion was important (20%)  or put more emphasis on how protection products could help them (19%)


the data pointing to how explaining protection products in context can lead to more meaningful discussions. The pandemic, more than any other event in recent years, has highlighted the fact that anyone can get ill at any time – not just those who are old or unfit. People are realising more than ever that sickness is not something that just happens to other people - it could happen to them, and that is making them feel much more vulnerable. According to AMI’s report, one in five people that currently do not hold IP say they are more likely to consider it as a result of the pandemic, but this doubles for those aged 18-34 and those with pre-school aged children. In fact, under 34s think Income Protection is just as important as buildings insurance, and there has been a 27% annual rise in the number of under 35s taking out IP. These numbers suggest that the events of the last 18 months or so have made younger people in particular start to see protecting the home and protecting the income that keeps that home as equally important. So, it is pretty clear that protection is firmly back on the agenda, but there is still some way to go, particularly when it comes to messaging and understanding, which is why I am so pleased to see AMI delivering tools that can help every adviser and every retailer in the country to have better protection conversations with their clients. The launch of their 4-page ‘What should I know?’ consumer guide, in association with the Protection Distributor’s Group and Protection Review, is a great – and most importantly – very short and simple guide that covers products, how to buy and what customers need to know in a few short pages. This compact yet comprehensive factsheet provides a great prompt for brokers and a handy resource for consumers, helping to bridge that gap between the messages advisers think they are conveying about protection and what is actually being heard, enabling them to have more meaningful protection discussions to improve consumer awareness and ultimately, protect more people. M I