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CV: Mr Traynor joined Paymentshield in October 2005 as sales and marketing director. His responsibilities include product marketing, PR and sales management. Prior to joining Paymentshield, Mr Traynor was the IFA sales director of Axa and most recently UK sales director of Prudential Intermediaries.

MA: What do you think has prevented mortgage advisers from arranging more protection in the past?

CT: Aside from some of the reputation issues that payment protection insurance has got, that has affected mortgage payment protection insurance, advisers in the past have made a good living out of just selling mortgages and life insurance. Mortgage payment protection insurance has not had as high a profile in terms of their product suite as it might have been. It has been the priority to arrange the mortgage and make sure life is covered. There is an indication they are now more receptive to MPPI now. People need MPPI and as the market is slower mortgage advisers are seeing their turnover go down and they need to sell other products.

MA: Can you tell us a bit about Mortgage Protector, your latest mortgage payment protection insurance product?

CT: It was launched a couple of weeks ago. We have been in the MPPI market for 15 years, since the business was formed. We felt the market needed a new, more modern and flexible product and that was why we launched the Mortgage Protector. Defaqto gave it a five star rating because the core benefits have been upgraded with free legal expenses cover for employment and bodily injury disputes plus free 24-hour health and medical, counselling and legal advice help lines. Getting back to work assistance has also been added so we have not just refreshed our MPPI product but modernised it. The typical product design in this sector has been around for a long time and we felt it needed to be refreshed.

MA: Have you worked with the sourcing systems to make sure Mortgage Protector can easily be compared with other MPPI policies?

CT: The way Paymentshield works is the mortgage adviser transacts with us. They do not use a system where they can see a price comparison. They transact with us but check the product out by looking at a range of suppliers before dealing with us. They select the provider they feel has the most flexible product at the best premium rates. They do not go onto a system like with the life insurance sector like The Exchange where they see a range of products. It is more simple than that.

MA: What type of client should advisers be recommending Mortgage Protector to?

CT: It covers clients for accidents, sickness or unemployment. In terms of unemployment every client is a potential client for MPPI. Some clients will have accident and sickness cover through employment based schemes but no employer gives you unemployment cover. The adviser has to find out through the fact find whether they need it. In the current climate there is a lot of nervousness around mortgages and job security at the moment. Mortgage Protector is a relatively cheap way to cover one of your biggest monthly bills.

MA: What feedback have you had on Mortgage Protector so far?

CT: We had feedback quite quickly as we had to go to major networks and ask them to approve it as a product. All the major networks have approved it as a product and we have had a real seal of approval for it. We are out at the moment doing roadshows and we had 250 people in York who felt very positively about it. I think they feel the market is ready for an MPPI product like this.

MA: You mentioned some of the issues surrounding the PPI market. What would you say to advisers who were put off recommending MPPI by some of the negative press the wider market has received recently?

CT: That does bother us. The actual issue is with PPI not MPPI. I think there are two issues for us. One is we need the adviser to be more confident that selling MPPI is much more acceptable and free of any potential issues for them than PPI would be. In actual fact the FSA are concerned because PPI is being reviewed, and as part of that MPPI is being reviewed, they are worried advisers will stop selling MPPI. Clients need that cover when they get made redundant and it would be concerning if advisers shied away from selling because MPPI because they thought they might be rapped over the knuckles. MPPI is still a suitable product for clients. We have also got a job to do in convincing the market that MPPI has not got the same stigma attached to it as PPI.

MA: What are the advantages of recommending MPPI for mortgage advisers who previously did not arrange such policies?

CT: Most mortgage advisers in the market are providing quite a comprehensive range of services for their clients. They are looking at their mortgage and their life assurance needs, their buildings and contents cover. Increasingly they are also looking at MPPI as it covers their clients at a competitive cost. Most people's biggest monthly bill is their mortgage interest repayment and MPPI covers that payment so in the event of you having an accident, being sick or becoming unemployed. Paymentshield will pay that biggest monthly bill for you in these circumstances and increasingly advisers are recognising that MPPI is a cheap way of covering their client's household bills.

MA: How will you work with intermediaries to increase take up of mortgage payment protection insurance?

CT: I think it is our job to promote the product and make advisers aware of the benefits of the product for them and of selling it. Advisers can increase their income by selling MPPI. The first issue is we have to continue to promote Mortgage Protector as a modern, suitable product for a lot of clients and also if the adviser sells it it will increase their income in a market where they are under a lot of pressure. Because the market is so difficult advisers are looking to cross sell more than they might have done in a more buoyant mortgage market. One of the products they should look at is MPPI.

MA: What commission is available on Mortgage Protector?

CT: We openly say to advisers that they must decide what is a suitable product for their client and once they have done that there is nothing embarrassing about them being paid for it. They give advice and they have to be paid for that. The commission Paymentshield offers them has two popular variants. One we call annual indemnity and the other is double indemnity where they can earn on a typical mortgage payment protection product about £100 a case and with double indemnity is about £200 a case. Annual indemnity pays every year while double indemnity pays upfront in year one and then does not pay again until the beginning of year three. Every year the client continues to pay the premium basically Paymentshield will pay 27.5 per cent of that premium and that comes out, roughly on an average case, at about £100.

MA: What part does protection play in treating customers fairly?

CT: We need to give the adviser as much material as possible to prove this is not a monthly outlay that they should stop paying, otherwise all they do is save £15 or £20 a month but they expose themselves to a massive potential risk if the mortgage market turned against them or they found themselves out of work and the property had to be repossessed. I think the job Paymentshield has to do is promote strongly through the adviser to the client that actually this is good quality cover at really cheap prices and that is a monthly bill they should think twice about not paying.

MA: Will the current economic conditions encourage more clients to consider MPPI?

CT: In light of the market circumstances we are pleased with how buoyant our MPPI sales are. The client and adviser are more receptive to the product at the moment. The client is aware repossessions are going up, employment prospects do not seem as good and in light of that they are aware this is cover they may well need. We are delighted our MPPI sales stay quite buoyant.

MA: MPPI is traditionally seen as a first-time buyer sale. Are you finding more people opting for MPPI with a remortgage?

CT: Yes. What we are finding is there are far fewer people buying houses but the number of people receptive to MPPI is far greater. Secondly, remortgagers typically do not get involved in a discussion about MPPI but typically now they are. The client is more aware of the need for the cover.

MA: What does the future hold for the mortgage payment protection industry?

CT: As a consequence of the PPI review that is going on the MPPI market's reputation will come out much stronger. The authorities will identify the products are very transparent, good quality and are available for reasonably cheap monthly prices. Where it is sold as part of an advice process, through an independent mortgage adviser, that process is very compliant. MPPI credibility will go up but we have a period of time where we must wait for the Office of Fair Trading and FSA to distinguish clearly between PPI and MPPI. We feel it will be distinguished and as a result the market will be much more confident about MPPI and advise on it accordingly.