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.
Protection Sales Increase Amid Softer Mortgage Demand
A recent report from Mortgage Strategy observes that as mortgage demand softens and brokers’ incomes decline, there is a corresponding rise in protection sales. Despite ongoing emphasis from networks on the importance of protection, the gap between those who need cover and those who have it remains persistent and may be widening.
The report notes that discussing protection with clients can be challenging for advisers, as it often requires clients to consider difficult scenarios. This conversation is particularly important for clients with dependants, as protection can help families maintain stability if circumstances change unexpectedly. The report highlights that protection should be considered an essential part of the mortgage process, not just an add-on product.
For letting agents and inventory clerks, the report points out that protection is just as important for renters as it is for homeowners, though renters can be harder for advisers to reach. The process of taking out a mortgage often prompts clients to consider protection, and brokers play a key role in guiding clients through their options.
According to the FCA market study cited in the report, intermediaries accounted for around 80% of protection sales in 2024. The study also found that 58% of consumers do not hold pure protection, and of those, 59% have not considered their needs. The report emphasises that protection sales are most successful when consumers are engaged and that advisers are crucial in helping clients navigate available options.
The report also references Consumer Duty, stating that firms are required to focus on good outcomes for clients over the long term, not just at the point of sale. Regular annual contact is recommended to ensure that clients’ circumstances are up to date and that their protection needs are still being met.
The report concludes that reducing friction in the protection buying process and ensuring clients understand the value of cover are essential steps for advisers and firms.
Source: Mortgage Strategy