Research has revealed the extent to which most mortgage brokers disregard selling protection insurance, with 61 per cent stating the current relationship is broken.
In advance of today’s (14 July) Protection Review conference, its organisers asked over 300 advisers online whether or not how the protection industry integrates with the mortgage market needs to be reconsidered.
Only 3 per cent said everything works well, while 36 per cent admitted things could be better.
A live Twitter poll was even more decisive, with 82 per cent responding ‘yes’, 11 per cent stating ‘maybe’ and 7 per cent saying ‘no’ to the same question.
Michael Aldridge, innovation director at London & Country Mortgages, said he expected a result showing low satisfaction, but was surprised by the extent of the discontent in the market.
“From an intermediary view, it depends on a number of factors, not least the internal processes and procedures of the mortgage brokerage,” he stated.
“Many mortgage intermediaries unfortunately treat protection as an afterthought, rather than an integral part of the mortgage fact-find and advice journey.”
Mr Aldridge admitted there could be better innovation from the protection market, calling for more bespoke mortgage protection products and processes tailored for mortgage applications.
“Not just for mainstream mortgages, but also areas such as buy-to-let and new-build,” he added.
Kevin Carr, chief executive of Protection Review who analysed the research, said protection sales always drop when mortgage applications go up, as getting the mortgage through is the priority, with insurance often fading into the background.
Problems associated with mis-selling of payment protection insurance also hamper discussions, he said.
“Some advisers don’t know when to introduce protection – some maybe try to sell it at the wrong time – others will argue customers aren’t that interested and PPI has put them off, while some advisers will blame a lack of knowledge, with products perceived to be complex and constantly changing,” he explained.
Mr Carr also accepted many advisers suggestions the rewards don’t match the effort, as underwriting becomes a pain, there is no guarantee of business going on risk and therefore no guarantee of getting paid via commission.
“Premiums for mortgage related cover should be higher so that more people are accepted quickly and on standard terms,” he added.