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Mortgages: a route to consumers?

On June 16, the research arm of Protection Review, known as The Syndicate, launched its 2016 report looking at consumer and adviser sentiment regarding protection and financial matters. The research showed that there was very little appetite among consumers to purchase protection products with 45% of those surveyed saying that nothing could persuade them to buy protection and only 24% of people saying that they were more likely than a year ago to review their protection needs with a view to increasing the level of cover.

The birth of a child was named as the most likely trigger for a purchase of protection, closely followed by the purchase of a house.  The advisers included in the adviser research suggested that a house purchase was the most important trigger for buying protection with the arrival of children in second place. 

There is no doubt that the point at which people are buying a home is a key moment in their "protection journey", one where they are open to thinking more generally about their financial situation and possible needs, including protection.  Are we doing all that we can to ensure that the most is made of this opportunity to speak to consumers and raise awareness of their protection and their vulnerability should the worst happen?

The Syndicate research suggests that we have an uphill battle on our hands with 44% of people saying that they were confident in making decisions about protection without using professional advice.  42% of people said that advice was not a necessary part of the process with regards to purchasing protection.  A further 26% were unsure either way with only 32% agreeing that advice was necessary.

The survey also showed high levels of uncertainty among consumers with regard to what exactly advice  is. 42% were able to agree that it may be helpful in ensuring that the right amount of cover was obtained but there seemed to be no real endorsement of the value of advice or the role that it can play. Conversely, the largest majority of advisers surveyed felt that the most important aspect of their role lay in explaining clients' financial vulnerability and helping them to prioritise their needs.


Protection chart


So what does all of this mean for the protection industry and the way that we reach consumers and those with protection needs?

The opportunity that a mortgage application presents is considerable and going forward we must ensure that protection is included in any house buying  conversation and must capitalise on having an audience with people who are poised and ready to consider their needs.  But should we be doing more?

With the average age of first time buyers on the rise, we need to find ways to have the conversation with people earlier and to get them to consider their protection needs.  After all "generation rent" still have protection priorities but we may need to reach out to them in new ways given that traditional channels may feel irrelevant to them. 

More than that, we need to be proud of the products that we're selling and the value that these products add.  The Seven Families project has shown that what is valued about protection is "more than the money" and yet the widespread obsession on price continues on all sides.  It is time to ensure that  we talk about the value of protection and not the just the price.   When people are poised to take on a huge financial commitment via a mortgage, the importance of peace of mind can surely not be underestimated.


Jo Miller, Head of Research, Protection Review