Mortgage advisers are perhaps better placed than anyone to spot and solve a client’s protection needs.
This is not just because they are helping with what is probably the most important financial decision of the customer’s life so far; but also because mortgages, unlike insurance, are aspirational. Or, at least, the new home is, and a mortgage is part of that journey.
People ‘want’ a new home — so their attitude and approach to mortgage advice are often open and welcoming. They don’t tend to ‘want’ insurance — so trying to demonstrate why life cover is important can generally be more challenging.
How can the protection industry make it easier for mortgage brokers?
Customers have many barriers in their mind when it comes to protection insurance: it won’t happen to me; I can’t afford it; it won’t pay out; I’ve got health issues already; and so on.
There are customers who think they can’t afford protection, as well as those who think their medical history prevents them from accessing cover at all. The process that mortgage advisers often have to follow in these situations can be complex and time consuming, which is offputting to many of them.
Those who are familiar with the protection market know there are many ways to quickly answer and overcome these points, often using technology. But those who are unfamiliar may need to undertake product research, produce indicative pricing through a quote portal, and then, having considered the customer’s medical history, undertake desk-based research to find the best insurer, which may result in a recommendation and/or insurer different from the original quote.
An integrated, single process would help with accessibility
All of which must be recorded appropriately for compliance.
Given the often complicated and time-consuming quoting process, the compliance rules and the fact so many customers are reluctant to engage in life insurance in the first place, it is understandable why a lot of mortgage advisers want to do mortgages only and would rather leave protection alone.
Help for brokers
So, given that mortgage advisers are well placed to write protection, and that the UK is woefully under-protected, the question is: how can the protection industry make it easier for mortgage brokers?
Might it be possible for mortgage and protection product sourcing to operate in the same way, making it simpler for mortgage advisers?
Technology is helping to transform the way protection advice is delivered
Through a combination of new technology, competition between lenders and changes in regulation, the mortgage market is successfully operating integrated, single-sourcing journeys. Technology has enabled the sourcing process to be integrated into the advice process, removing complexity. This has created an experience focused on ensuring the customer has access to the most appropriate mortgage product, having considered their individual circumstances.
In turn, this process gives the customer confidence that they can access and afford the right product.
With the sourcing process being integrated into the advice process/customer relationship management (CRM) platform, a digital record is created of the advice given to the customer, the terms offered by the provider and the customer’s agreement to proceed.
Buying a new home is aspirational — but so is being able to keep it
At the heart of this digital sourcing process is a focus on ensuring the customer receives the right advice, and the mortgage product they purchase is affordable and appropriate for now and the future.
Protection gap
In the protection market too, technology is starting to enable this process.
There is integration into leading CRM systems and research platforms so that one combined sourcing process can exist, complete with automated underwriting and everything stored digitally for compliance purposes.
For many years we have all talked about closing the protection gap; making protection more accessible. Through an integrated, single sourcing process we could take a significant step forward in the challenge of accessibility, replacing the existing broken and complicated process for sourcing protection products.
It is understandable why a lot of mortgage advisers want to do mortgages only and would rather leave protection alone
People go on a property ‘journey’, from renters and first-time buyers to second steppers and maybe all the way to forever homes, which makes protection an ongoing touchpoint rather than a ‘one and done’.
Technology is helping to transform the way protection advice is delivered. Lenders, advisers and insurers can use this technology to grow their revenue while ensuring their customers are suitably protected for whatever life may throw at them.
Yes, buying a new home is aspirational — but so is being able to keep it.
Mark Cracknell is intermediary solutions director at UnderwriteMe
This article featured in the April 2024 edition of MS.
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