Protection Update 26th November 2021

Protection Update 26th November

Hi everyone, Vincent here… and welcome to this week’s protection update.

So, did you manage to get along to the NTE yesterday?

Well, it was virtual, so you wouldn’t have had to drive anywhere but I thought it was really good and it was great to hear so many opinions all about that overall objective of maximizing sales opportunities as we start to look forward to 2022.

I was making my notes during the various sessions but I just felt I’m going to need to watch some of this again to make sure I haven’t missed anything.  There were so many good ideas about how we can genuinely look at making 2022 our best year yet across all the different propositions you happen to operate in.

Congratulations to all the winners of the various awards this year – let me just pick out the protection specific awards.  Overall best protection firm – Parkway Financial Solutions – really well done Kevin, you’ve had a phenomenal year for protection.  Superstar!  You are an inspiration.  You’ve protected hundreds of clients this year alone!

Outstanding newcomer – The Protection Parent (you’ll have to build a bigger trophy cabinet Karla!).

JBM Mortgage Brokers and Regal picked up an award and highly commended too so again, well done for all your efforts.

Did you see my protection panel discussion? It was towards the beginning of our NTE but I thought there were some really good businesses development ideas from Aviva, Vitality, Aegon and Royal London.  They really did all talk a lot of common sense.

And our guest adviser speaker on the panel was the award-winning Ash Lee James from Weystone.  Thank you Ash for taking some time out and joining in the discussion.

Again, take a look at the replay when we post it on the adviser site.  There were some nuggets of gold in that discussion with regards to protection!

Watch the Protection Panel from the National Training Event >>

Association of Mortgage Intermediaries – 2021 Report

This week should see the release of the 2021 AMI Report and I’ll share some of the findings with you once I receive my copy (the AMI is the Association of mortgage intermediaries).

Now if you joined us at any of our recent regional roadshows you might remember a bit from my short protection presentation.

I actually had to cut quite a chunk out because we did squeeze a lot of content onto those sessions… but the thing I did keep in was a couple of stats from the AMI report which came out almost exactly 12 months ago.

In the report, there was a lot of commentary about the state of the mortgage market with predictions about what we could expect over the next year and beyond, but the thing which stuck out to me was a piece of market research they carried out with a group of advisers and a group of clients.

Just to be clear, there were 499 mortgage advisers surveyed, of which, all of them were active in the market and all of them had a license to advise and recommend on protection insurance.

When it comes to the clients; these had all recently had a mortgage advised and recommended by an adviser.  There were 5001 clients surveyed.

There were 2 questions in the survey which I thought were very telling…

The first was aimed at mortgage advisers.  It asked the question “do you mention protection when advising and arranging mortgages for your clients?”

Around the roadshows during the last couple of weeks, I think the general consensus was a high percentage to that question.  And in fact it was 97% of mortgage advisers who were surveyed said they do ‘mention’ protection to their clients.

Personally, I’m not completely happy with the framing of that question.  Is the word ‘mention’ any real kind of test to the quality of the conversation about protection?

But even still… 3% of mortgage advisers admitted they don’t even mention it.

Can you believe they admitted to that?

If we move onto the second question in the survey, this was aimed at customers.  People who had recently had a mortgage arranged by an adviser.

The question was “do you remember your mortgage adviser mentioning protection to you?”.

And what was the response?  Remember, this was 5001 customers…

36% of them said they remember their adviser mentioning protection to them.  That means 64% of customers couldn’t remember their adviser mentioning protection to them.

That’s clearly shocking.

And I go back to the key word in each survey question… ‘Mention’

What I’d be looking for was a meaningful conversation about the risks associated with taking out a mortgage.  A conversation where the client can make an informed decision about what they need to do.

But the fact that statistic is so lousy does represent an opportunity for you.  If other advisers aren’t talking about protection, you’ll be able to demonstrate why you’re better.

I remember interviewing Andrew Biggs from Elmo House (Hello Andrew) and I asked him what are your top tips that help you better engage with your clients about protection?

Andrew said its important to take the time and have the patience… clients don’t do this every day… so talk though exactly what we’re offering.  He then said “very often when I speak to clients and I’m successful; it’s because someone who came before me hasn’t taken the time to explain things properly …”

That interview (and a few others) is something we play to advisers joining the network during a sales workshop we run called “Putting Protection on the Agenda”.

And it’s all about this balancing act you have as a mortgage adviser to make sure you’ve got a process that allows you to sign post, set up and have the conversation about protection.

When I talk about the risks associated with taking out a mortgage; what do I mean?

I mean the risk statement which is on your mortgage illustrations and mortgage offers.

There are some different versions but they are all basically saying the same thing…

Your home is at risk if you do not keep up repayments on your mortgage.  That’s written by the regulator for financial services, the FCA.  Your home is at risk?  What does that mean?  It means you could lose your home!

How might you lose your home?  If you can no longer afford to pay for it.

How can that happen?  If you ask that question, do you think your clients will be able to answer it?

What could stop you from being able to pay your mortgage every month?

They could lose their job…  How could you lose your job?  I could be made redundant; you could get the sack…

But those are things in your control… what things could happen unexpectedly and out of your control?

I could get sick or have an accident.  Yes, and what’s the worst that could happen?  I could die?

Clients will be able to work these scenarios through but very often, they’ve not thought about it before.  They will be able to answer that question though.  Your job is to facilitate those questions to put them into an informed position.

As you’ll very often hear me say; simply give your clients the opportunity to tell you they don’t want it.

But that’s not off the back of you ‘mentioning’ protection.  It’s about talking to them so they understand.

If you’re interested in joining me for a couple of hours on one of our ‘Putting Protection on the Agenda’ workshops, give me a shout.  We run these workshops online every month.

Vitality Launch

Now in my position within the Right Mortgage and Protection Network, I look after the relationships with all of our protection providers so I’m not supposed to have any favorites and actually, the bottom line is that if a client gets some protection, that’s a good outcome in my book.

But, I do appreciate quality and I appreciate proper advice by advisers.

Think about your spending habits.  Are there things that you buy which are something you would describe as quality?  In other words, you could get a cheaper version, but you prefer the quality?

It could be cars, holidays, restaurants, food, supermarkets, clothes, gadgets etc etc.

Well, from a protection point of view, personally, I appreciate quality and I do like Vitality and other providers who offer quality propositions.

I think Vitality have innovated the protection market and they’ve forced other life companies to try and keep up.

Take for example the simple concept of severity-based payments.  In other words, an amount of cover that will be paid relative to how severe the condition is.

It was that type of thing which nudged the other life companies to come up with things such as partial payments and additional payments on critical illness cover plans – other ways to pay claims beyond that original set of ABI standard definitions.

Antoinette Rizzi who presented at 3 of our November Roadshows asked the audience a question… Why does Vitality have this engagement program built into the fabric of what they do?

The answer is simply to make people healthier and enhance and protect their lives (that’s the Vitaltiy mission statement) – and if that happens, Vitality pay less claims but that’s a good outcome for them and it’s a good outcome for customers.

Nobody wants to claim on a protection policy because if you do, it means something bad has happened.

Well, there was a Vitality launch this week and the big headline was this new approach to customer engagement…

And what that is, is to Help Members Live Longer in Good Health

Sounds good, but what does it mean?

Well, we all know there are things we can do to make us healthier and live longer.  But some things are more important than others and would make a profound difference.  And, as the headline says “live longer, but in good health”.

So, what they are doing is introducing something into the engagement program that will prompt clients to take what they are calling their ‘next best action’.

There’s a lot of data science behind this approach but it’s actually really simple.  The ‘Next Best Action’ will focus the customer on the one action that would have the biggest impact on their future health and the customer will have access to all the tools in order to meet this objective in a reasonable period of time.

So an example could be to give up smoking, lose weight or various other things…

And the incentives are worth going for.  It could for example accelerate a customer to Platinum status a lot more quickly by achieving this ‘Next Best Action’ goal.

I’m sure I’ve not done this justice so I’ll get Antoinette or one of the other members of the Vitality team to come on a podcast to run through this all properly, but I think this could be really groundbreaking.

A protection plan that gives you what you need to live longer in good health.  That’s what we all want isn’t it?

You’re going to get a lot more information about this in the coming weeks and months, and I’ll see if I can get Vitality onto one of these podcasts to get into some of the detail.

Royal London Renters Toolkit

And finally, I just wanted to point out a new protection insight podcast this week that I recorded with Tony from Royal London.

For me, the rental market is probably one of the biggest missed protection opportunities and it’s going to be a growing market over the next few years.

So I had a chat with Tony to talk about a new toolkit that Royal London have produced which will help you open the door with letting agents, landlords and tenants.

It’s attached to this weeks protection update, so take a look and see what you think.

That’s it from me for another week.  Have a great weekend and I’ll see you soon.