Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
Industry Roundtable Debates UK Protection Gap and Public Perception
A roundtable discussion organised by Mortgage Strategy, in partnership with the Association of Mortgage Intermediaries (Ami), has brought renewed attention to the UK's ongoing 'protection gap'. The event, hosted by insurer Royal London at its Fenchurch Street office, gathered representatives from across the protection sector to debate how best to address this issue.
The roundtable focused on the public's perception of insurance products such as income protection (IP) and critical illness (CI) cover. Participants agreed that these products are often seen as optional rather than essential, with many consumers underestimating their value until it is too late. The discussion highlighted the need to reposition insurance as a form of lifestyle protection, designed to maintain a family's standard of living and provide financial security during periods of ill health.
Panel members noted that misconceptions about the cost of protection products persist among the public. According to the discussion, many consumers overestimate the price of cover, which can deter them from seeking advice or purchasing policies. Industry representatives argued that it is the responsibility of advisers to clearly communicate the value and actual cost of protection to clients.
The roundtable also addressed the impact of negative media coverage, which often focuses on instances where insurers do not pay out. However, the discussion referenced payout rates for UK insurers, with income protection claims commonly paid in the 85%–96% range and critical illness claims typically paid on around 90% of occasions, depending on the provider.
For letting agents and inventory clerks, the debate underscores the importance of understanding and communicating the value of protection products to clients, particularly those with significant property assets. The roundtable concluded that bridging the protection gap will require a shift in public perception, clearer messaging from advisers, and a focus on the real value of insurance in safeguarding income and lifestyle.
Source: Mortgage Strategy