The Association of Mortgage Intermediaries (AMI) today launches a new report based on extensive consumer and adviser research.
‘The New Protection Challenge’ report, which asked 5,000 consumers and 500 mortgage brokers a range of detailed questions about the protection market in September this year was produced in partnership with Legal & General and Royal London. The 32 page report, which we believe is one of the most comprehensive studies of the mortgage protection market ever carried out, includes the following key findings:
- 97% of advisers say protection was mentioned in the mortgage process – but only 36% of customers remember it being mentioned, suggesting a perception gap between consumers and the industry
- Buying a house or moving home are 2 of the 3 key drivers to buying protection, while home insurance is considered the most important insurance policy
- Less than a third of UK adults can correctly identify what income insurance is
- Over half of consumers don’t believe protection claim statistics
- The majority of consumers would prefer protection to be arranged before or during the mortgage process (not after)
- 1 in 7 mortgage brokers refer protection to a specialist
- Covid-19 has not impacted the likelihood of getting protection for the majority of consumers
Robert Sinclair, Chief Executive of AMI said: “The challenge our industry faces is how do we get the consumer onside and trusting this market during their journey through mortgage advice to protection advice. The research shows a great opportunity for advisers to better engage with customers. Our collective task is to encourage advisers to rise to the New Protection Challenge.
“We appreciate the partnership with Legal & General and Royal London to deliver this work of scale and would like to thank the many advisers who contributed to the report.”
Commenting on the research, Chair of the Protection Distributors Group, Alan Knowles said: “The research is very enlightening and could suggest that if protection is being discussed with mortgage customers that it’s not always being done in a manner that impresses its true value and importance.”
Vikki Jefferies, Proposition Director at Primis added: “With less than a third of UK adults able to correctly identify what income insurance is, it will be up to advisers to help boost consumer awareness on this product.”
David Ellis, Head of Strategic Partnerships at Royal London, commented: “The big three findings are the lack of trust around claims statistics, the poor customer understanding around Income Protection, and the fact that the vast majority of consumers think life insurance is important but only the minority have it. We will continue to work with advisers and support them to overcome the challenges highlighted in the report.”
Craig Brown, Director, Intermediary Insurance at Legal & General, said: “The report suggests a communication gap exists between what advisers think they are transmitting versus the messages customers are actually receiving. We would welcome an industry wide focus from insurers and distributors to highlight the importance of protecting all potentially vulnerable people and families.”
Launch of Protection Specialists Group
The launch of the report coincides with the launch of a new AMI Protection Specialists Group (PSG), which combines heads of protection, proposition directors and practitioners across a range of firms, networks and mortgage clubs.
The purpose of the group is to focus on pure protection and general insurance (GI) issues, providing insight and front-line experience into issues and opportunities facing the market.
Robert Sinclair, Chief Executive of AMI added: “The PSG will help shape AMI’s policy and lobbying positions and develop future strategy in the protection arena. The AMI board wants to hear more from this group as there is a need for representation of member firms that distribute and provide advice on protection products, as this is a core aspect of work that member firms undertake.
“The group will discuss and debate topics that are currently relevant to GI and protection products and affect a mortgage intermediary firm. This will include: Market issues, Regulatory consultations, Industry collaboration.”