Neal Jannels, Managing Director: Embrace protection to strengthen customer relations
The dynamics involved within the mortgage intermediary landscape and the pace of change have always posed their own unique set of challenges. As such, proactive brokers are constantly evaluating ways in which to differentiate themselves in the market.
It’s no secret that the value attached to financial advice has sharply increased in recent times. This is evident in sustained intermediary market growth, with the Intermediary Mortgage Lenders Association (IMLA) predicting the share of mortgage activity conducted via mortgage brokers will hit 90% by 2025 – rising from 84% in 2022.
With the volume of residential transactions stalling, this upward trend means brokers need to ensure they’re maximising opportunities with their existing (and new) customers by incorporating as many different revenue streams as possible. This is especially important for those generating residual income.
One way to do this is by focusing on your protection knowledge, which will not only produce regular returns but also help strengthen customer relations.
Based on conversations we’re having with our brokers and strategic partners, higher levels of competition and the need for comprehensive financial solutions have driven the demand for protection. This presents a clear opportunity for brokers to diversify their portfolio and further improve customer retention – protection can make a huge difference to those who need it.
According to research commissioned by Beagle Street (part of the OneFamily Group), of the 2,000 people surveyed, almost three in ten (28%) young adults aged between 18-40 in the UK said they don’t have Life Insurance despite having purchased a mortgage. This equates to 1.7mn homeowners without a financial safety net if the worst were to happen.
Additional findings from the insurer suggest that there was at least £433bn in unprotected mortgage debt in 2023. This represents the combined value of home loan debt that would be owed if an unexpected death were to occur.
Of those who have a mortgage but no Life Insurance, 23% said it’s because they don’t currently see it as a priority expense, followed by having never thought about it (22%), not being able to afford it due to the Cost-of-Living Crisis (22%), and simply not being able to afford it (19%).
When looking to buy Life Insurance, the most common resource those with a mortgage used was a financial adviser (44%), with only 16% going directly to a provider. This demonstrates there’s clearly opportunity to talk more about protection, but how can brokers tap into it?
Integrating with the right customer relationship management (CRM) system will allow them to easily adapt and manage protection offerings. For example, we’ve integrated with Uinsure, iPipeline, Source Insurance, Underwrite Me, and Legal & General (L&G).
This enables brokers to generate automated quotes and help drive greater understanding of protection at key moments within the mortgage journey. Considering most borrowers are likely to only speak with one broker during their journey, those who embrace this will put themselves in a stronger position to provide support when customers need it the most.
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