The Association of Mortgage Intermediaries has launched a five-point protection action plan aimed at “propelling the industry forward, at a time when the UK consumer needs our advice and solutions more than ever”.   

The plan is part of the body’s third annual Viewpoint Report on protection within the mortgage industry, called The Great Protection Shift, produced in partnership with Legal & General and Royal London, which asked 3,000 UK adults and over 250 advisers their views on the protection market.   

Ami chief executive Robert Sinclair says the report highlights, “clear messages on what we need to change and how to address consumers differently. The Financial Conduct Authority Consumer Duty requirements provide an excellent accelerant.   

“This will compel all firms to think about what their service proposition is, how to position the protection conversation and how to deliver it in simple language that the consumer can understand.”  

He adds: “There are multiple challenges facing us all. Post-pandemic issues; the energy crisis, the escalating cost of living, increasing interest rates, and the insidious pressure of regulation. Despite these, it is our duty to make sure our advice industry is thriving this decade and into the next.”  

A summary of the Ami’s five-point plan is that:  

• Advisers should “consider whether they clearly and confidently articulate the value of protection advice to consumers” and must “shift overall protection conversations away from price, to price and quality”  
• Firm/network principals should “consider their approach to protection in light of the FCA Consumer Duty and feed Ami Viewpoint findings into their Consumer Duty work”. Where firms do not advise on protection, or are unable to assist a customer, they should direct them towards a third party  
• Providers should “commit to working with advisers to understand the pain points and seek to address them where possible”. A practical example of this is advising brokers on how to discuss medical conditions with customers  
• Providers should also “consider ways to supplement claims statistics and widen the use of case studies, such as by sharing customer views on their experience of the claims process and by sharing real life stories of why customers have protection cover, featuring diverse customers from a range of backgrounds”  
• And the Ami will “work with its Protection Specialists Group, Royal London, L&G and the wider industry to develop thoughts on how we can tackle the barriers highlighted in the report”  

The report threw up wide-ranging issues and perceptions around insurance cover.  

It finds that 35% of consumers perceive affordability as a barrier to protection, rising to 48%, of those between 35 and 44.  

If consumers had to buy mortgage protection today, 56% would go online, compared to 27% who would buy it face-to-face, and just 3% would do so by video call.  

The study says that 19% of customers have never reviewed their insurance policies, rising to 24% of women, while 35% of people who used a broker to buy a plan have had no further contact since the initial meeting.  

For three consecutive years of this report, 56% of consumers this year “do not trust insurer claims stats”. This figure rises among older people, with just 72% of them believing that life insurance claims are paid, falling to 60% who believe the same about income protection.  

Royal London customer life stage director – protection Carrie Johnson says: “As life gets more expensive, people are having to make difficult choices about their monthly outgoings and protection insurance may not seem to be an essential cost.   

“Providers and advisers have a responsibility to continue to help people understand the benefits of having cover in place and the financial security it provides if they were to face a life shock.”  

Legal & General director of intermediary Julie Godley adds: “As the cost-of-living crisis continues to bite and people focus on getting by day to day, it’s easy for them to underestimate the value of their long-term protection.   

“Protection can be hard to justify, but it can be a financial lifeline to cover essential living costs like mortgage payments or even food. Life cover is no substitute for the loss of a life, but it does protect families from an incredibly difficult additional financial burden.”