More than half of consumers do not believe protection claim statistics, according to research from the Association of Mortgage Intermediaries (AMI), signalling an "opportunity" for advisers to put things right.
In a September survey of 5,000 consumers, 43 per cent said they did not trust “very much” the accuracy of claims statistics given by insurance companies, while 14 per cent said they did not trust them at all.
A record 98.3 per cent of protection claims were paid out in 2019, according to figures released by the Association of British Insurers (ABI) and Group Risk Development.
Robert Sinclair, chief executive of AMI, said: “The challenge our industry faces is how do we get the consumer onside and trusting this market during their journey through mortgage advice to protection advice.
"The research shows a great opportunity for advisers to better engage with customers.”
He added: “Of most concern to me was that 52 per cent of consumers felt that if an adviser suggested they get protection insurance the motivation would be to increase their commission and not to ensure they are financially protected.”
The research, which also surveyed 500 mortgage advisers, found the majority (97 per cent) said protection was mentioned in the mortgage process. However, only 36 per cent of customers remembered it being mentioned.
Craig Brown, director of intermediary insurance at Legal & General, said: “This suggests that a communication gap exists between what advisers think they are transmitting versus the messages customers are actually receiving.
“There is perhaps a need for more structured protection conversations - or maybe more conversations with protection specialists.”
The AMI survey also found a greater take-up of general insurance compared to protection, with a third of consumers saying they had life insurance, and one in 10 critical illness insurance, but 61 per cent said they had contents insurance, and 51 per cent insured their buildings.
New industry group
The AMI has launched a Protection Specialists Group (PSG), combining heads of protection, proposition directors and practitioners across a range of firms, networks and mortgage clubs.
According to the AMI, the group will focus on pure protection and general insurance issues, giving insight and frontline experience into the issues and opportunities that face the market.
Mr Sinclair added: “The PSG will help shape AMI’s policy and lobbying positions and develop future strategy in the protection arena.
"The AMI board wants to hear more from this group as there is a need for representation of member firms that distribute and provide advice on protection products, as this is a core aspect of work that member firms undertake."
He said the group will debate topics that are currently relevant to GI and protection products and affect a mortgage intermediary firm. This will include: market issues, regulatory consultations, industry collaboration.
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