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AMI reveals The Perception Gap, its fourth annual Viewpoint report

The Association of Mortgage Intermediaries (AMI) today launches its fourth annual Viewpoint Report on protection within the mortgage industry – The Perception Gap. It delves into current hot topics facing the industry, including the value of advice, building trust, consumer buying habits and generational views and attitudes.

The report, produced in partnership with Legal & General and Royal London, asked 3,000 UK adults and over 400 mortgage advisers their views on issues relating to the protection market, alongside qualitative research involving a bespoke community of consumers. Back for a second year is AMI’s ‘call to action’ – a Five Point Plan – refreshed with the key areas it believes the industry should focus on to help shift perceptions.

Lack of online protection presence is a potential missed “Millennial opportunity” for advisers

In a new area of research for 2023, the AMI study found that:

  • One in three (34%) adviser firms have no online presence when it comes to protection.
  • A firm’s website is its online ‘shop window’, however just over half (53%) of adviser firms have a protection section on their website and only a fifth (18%) have online guides or articles on protection related topics.
  • Only one in four (24%) adviser firms post about protection on social media and 5% have an online quote form.
  • Just over one in 10 (13%) of advisers personally create protection related content on social media.
  • Facebook (88%), LinkedIn (59%) and Instagram (59%) are the most popular platforms used by advisers active on social media. Just 11% use TikTok or YouTube and only 18% post on X (formerly known as Twitter).

Advisers’ choice of social media platforms could mean they are failing to reach the protection customers of the future. AMI found that younger generations (Generation Z in particular), who are heavy users of digital and social channels across all walks of life, see protection as being more important than older groups; 78% Gen Z and 76% of Millennials think it’s important to have protection (compared to 66% of Gen X and 58% of Boomers). Around 90%2 of Gen Z use TikTok and YouTube, platforms both used by only a minority of advisers to raise awareness of protection.

Buying habits may be shifting amongst the younger generations

One in three (31%) of all consumers say they’d prefer to buy protection via a price comparison website, the most popular answer, but younger generations (22% of Gen Z and 26% of Millennials) are less likely to prefer this route compared to older generations (33% of Gen X and 35% of Boomers). Nearly 1 in 4 (24%) Gen Z consumers said they would prefer face to face, compared to 21% of all adults.

All this highlights the importance of advice firms blending tech with the human touch.

Value of advice – 1 in 5 consumers struggle to identify any benefits of using an adviser for protection

  • Encouragingly, there has been a rise in the number of consumers that recall an adviser-led protection conversation – 50% versus 36% in 2020.
  • However, when asked about the benefits of using an adviser to purchase protection insurance, nearly a quarter (22%) of consumers answered, ‘don’t know’, while top reasons were knowledge, ability to speak to a human and their regulatory status.
  • One third (37%) of consumers view price comparison sites as independent or impartial — more than those that view advisers as the same (27%) and only 16% of consumers view advisers as unbiased towards one type of product or insurer.
  • Almost one in two (47%) of consumers think advisers’ main motivation if they advised them to take protection was earning commission (2022: 50%, 2021: 42%, 2020: 52%), although there are green shoots amongst the younger generations who are less likely to hold this view (37% of Gen Z and 45% of Millennials vs 47% and 51% of Gen X and Boomers respectively).

Building trust

The study also found that younger people are typically more trusting of insurer claims stats.

  • 66% of Gen Z and 65% of Millennials say they trust them vs just 44% of Gen X and 37% of Boomers.
  • However, it’s clear the industry needs to evolve its approach as nearly 1 in 3 consumers (30%) say neither percentage nor monetary based claims figures gives them reassurance that a protection claim would be paid.

Robert Sinclair, Chief Executive, Association of Mortgage Intermediaries said:

“In this year’s Viewpoint we particularly wanted to understand the behaviours and opinions of younger consumers – our industry’s future customers – and how they potentially differ from older generations.
“We’ve seen some positive indicators that present a reason for the industry to feel optimistic, including a higher proportion of Gen Z respondents viewing protection insurance as important compared to older consumers. However, there is work to be done to fully realise this potential. As part of this year’s Five Point Action Plan, we call on advice firms to assess whether it’s clear to consumers the role they play in the protection advice process and the value of good advice. Our recommendations also include actions for advisers, providers and AMI itself, as we all need to commit to making a difference if we are to fill the perception gap.”

Julie Godley, Director of Intermediary at Legal & General said:

“It is encouraging to see that for younger consumers, protection is important. These insights provide fantastic opportunities for
advisers and providers alike to adapt, embrace technology and communicate the value they can bring to Gen Z and Millennials. But the onus is not just on the adviser. Providers also have an opportunity to provide engaging digital content which resonates with a younger customer that advisers can share across several online platforms.”

Carrie Johnson, Customer Life Stage Director at Royal London said:

“The results of the Viewpoint report are really promising as they illustrate improvements already being made to increase engagement on protection with all customers, as well as highlighting the opportunity and responsibility we all have in helping younger consumers. Protection cover can play a huge part in helping people feel financially secure throughout their life, but they don’t always know that. As an industry we need to make sure even more protection conversations are happening as early as possible, either digitally or face to face, leading to more people having the right cover in place when they need it.”

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