Putting Protection Viewpoint insights into action - part 1

Hello and welcome to our latest episode of the Money Talks podcast series in partnership with Royal London. Today I'm joined by Shelley Reid from Royal London and Stacy Penn from AMI. So before we get into the main part of this podcast, Shelley, do you want to introduce yourself?

Yes, I'm Shelley Reid. I'm Senior Protection Technical Manager here at Royal London and I have the pleasure of talking to advisers pretty much all day, every day about having real robust protection conversations and talking to more people about their protection portfolio.

Amazing. And Stacy.

Thanks Kimberley. Great to join yourself and Shelley today. So I'm Head of Policy at AMI. So we're the Association of Mortgage Intermediaries. We're the regulatory and lobbying trade body for mortgage intermediaries. Insurance is something I'm very passionate about and I've been helping to run our Protection Viewpoint research for the last six years, which I know we'll be touching upon in this session.

Yes, so Royal London are proud sponsors of AMI’s annual Protection Viewpoint research. So today we're going to discuss some of the key themes that the 2025 study revealed and what opportunities this could bring advisers. So, the research did show that renters feel financial pressure more acutely than homeowners, especially young adults. So, Stacy, how can we better support this underserved market?

Yeah, and you're right, Kimberley, it is an underserved market. And I think that's not by want of trying. I think as the sector, it's something we've given a good go at over the years, but it's been a tough nut to crack for various different reasons.

And I think when you look at the breakdown of the rental sector, we've got people getting onto the housing ladder later in life. The average age of a first-time buyer is now around 34. So we've got many young adults spending a significant portion of their lives in that private rental sector. And we've seen the percentage grow over the years. It rose from 2008/2009, where it's 3.1 million to the 2023/24 figures to 4.7. So it's the second largest housing tenure in England, home to 19% of all households.

I think if we look at ways that we could serve this market better, something that I've been thinking around is mortgage advisers by their very nature, their business, they are focused on the mortgage. Is there a way we could actually shift that, and I know it's quite a shift in the business model, actually. But what about if protection was actually that anchor? So to help this market that we're not reaching at the moment, then build that relationship, that rapport over time, so that when some of these customers are thinking about buying a home, you’re front and centre of their mind. You've helped almost kind of shape and get them mortgage ready to that point. So I think that's something for the industry to seriously consider about. And I know it's not as easy as that potential opportunity.

Yeah. And Shelly, why do you think it's important that renters get protection advice? I feel like they're probably the largest segment of the population that don't get that advice.

Absolutely. I mean, we know that most people buy their first protection policy when they have a mortgage and buy their first home. But I'm really passionate about the fact that renters really need to get protection advice. Of course, they haven't got a large mortgage debt to protect, but they certainly have monthly outgoings. They have that rent, utility bills, they might have a car loan, you know, or a credit card. So they've certainly got commitments that they need to think about protection for.

The other thing that I think as well is that not all, but most, people in the rental sector have aspirations to buy their own home. So as well as paying that monthly rent and all their other household bills, they are saving hard for that, a deposit for that, you know, much longed-for home ownership. And if something does happen, maybe someone, you know, one person dies prematurely or one of them gets ill seriously or less seriously, but still has to take some time off work, then I think it's such a shame to have to dip into their hard-earned deposit to pay their rent and maybe, you know, a supermarket shop or their gas or electric bill. You know, and it doesn't need to be that way. We can set up protection that can step in if that happens and protect their deposit. And also, importantly, I think for those wanting to have a mortgage, it can protect their credit score. So they've got an income to make sure that they don't fall behind on any of their commitments, and their credit score for their, you know, future mortgage remains intact. And I think most of us as providers now have very flexible modern protection plans that can evolve from a plan that suits someone renting, that probably is based more around a monthly income than a lump sum, that can evolve into a different protection sort of portfolio when they're owning a home.

So for me, the big shift is away from talking about debt protection with someone renting to actually lifestyle protection. And maybe I'd ask Stacy again now, we've talked quite a lot about income protection, and maybe how have you found that that resonates with the younger generation?

Yeah, so it's certainly something we've been looking at over the years with Viewpoint, and this has been backed up by other research that's been done in the sector, that younger consumers are perhaps more interested and engaged with income protection than we first thought. So I think it's great, Shelley, you're talking about some of the angles and the language there, because I think that is a really key piece with the younger generation. And I think there is a real opportunity, because the question we asked last year in Viewpoint was around consumer understanding and one in four people said they have no understanding about income protection. So I think there is that educational piece as a starting point to help them understand the concept. And I think there's such a great opportunity to reach the younger generation through things like social media, as well, more on the educational side again, just helping to bring that product, that whole concept to life and for them to see how that fits in, like you say, Shelley, with their own goals and their future planning.

Yeah, I think that it is also a great opportunity for advisers. I think many advisers pass-by those who are in the rental sector, sort of parking them ready for when they are about to maybe buy their first home or get back on the housing ladder. And really, I would really stress the importance of not passing those by who haven't got a mortgage or a debt to protect at the moment, because as we said a few minutes ago, you know, they still have a protection need to make sure that their lifestyle and their future aspirations are protected. And I think it can also, when we're looking at opportunity for advisers, it can also be a real advantage when we're looking at referral opportunities, which I think we're probably going to talk about now, Kim, aren't we?

Yeah, yeah. So another interesting point from the research is that 60% of advisers are relying on their existing client base for protection opportunities and 56% of customer referrals, with more than half of consumers surveyed saying they'd be happy to be referred to another business for protection if their mortgage provider doesn't offer it. So Stacy, what does the phrase referral opportunities mean to you?

So when we think about referral opportunities, I'd like to come at it from a different angle. So the angle of referring your customers to another person, if you're in a big enough business to do so, or a third party, so another business. And a challenge that we've always come up against as a sector is when the mortgage market gets
busy. And here, not just talking about consumer driven, but external factors outside of our control. So things like the geopolitical instability that we're seeing at the moment, which is impacting mortgage pricing and products and therefore impacting advisers' workload, is that the focus on protection can sometimes reduce. And that's not to say there hasn't been great work in there. There's lots of ongoing work happening within the sector to think about that challenge. I think another angle to look at is this, referrals don't have to be all or nothing. Is there a space for a
hybrid approach? So recognising that there are peaks and troughs in the business, but there may be a chance to almost use that referral mechanism as and when you feel you need to.

And we talk a lot about building consumer trust, but there is a trust piece here around who you’re referring your business to. And I think that is an area for advisers to think about. And I've got some tips, if I may, around what advisers could do if they're thinking about using referrals or not really sure where to start.

I think contract is key. So a lot of advisers may have concerns that if they partner with someone, they have a referral partner, they could go after their mortgage business. That could be something that you agree won't happen, that's built into the contract, or you might want to consider a protection-only business as your referral partner, then it's not a concern.

There's also the commercial arrangements part of that referral relationship. I think you need to think about things like how that's reflected in your initial disclosure documentation, your scope of service, but also giving you that reassurance that the business you are looking to refer to - what is their structure? Do they operate from a panel, a whole of market? Does their proposition meet the needs of your client bank?

And then the third part is the customer journey. And really that is key, again, to give that confidence and reassurance and review how this will work in practice. You might even have a chance to go through that journey yourself to see how that unfolds, how it's positioned, understand how much customer information and background you provide as part of that referral and thinking about things like GDPR, do you have permission to do this? So, there are just some tips for areas for advisers to think about when considering referral partnerships.

I couldn't agree more, Stacy. And I think when I think about referrals, I think about sort of internal and external referrals. So internally, I mean, within your firm, we see lots of firms where they have sort of silos of advisers. So a pension adviser, a wealth and investment adviser, a mortgage adviser, and maybe a standalone protection adviser. And I think it's so important to link all of these clients together so that the advisers feel very comfortable in referring to different experts within their company. So we see that work really well, you know, when someone maybe is looking at protecting their inheritance, you know, maybe talking about IHT planning, maybe the wealth and the protection advisers can come together. So it works really well internally.

And I think when we're looking at external referral partners, you're absolutely right in what you're saying, Stacy, that there is an element of trust that needs to be involved there. But I think I'd just say to advisers, you know, look a bit more widely. For example, you know, if we've got a mortgage adviser, I've no doubt that they have got relationships with conveyancers and lawyers who deal with house purchase. But maybe look at asking for a referral to a family lawyer who maybe is dealing with divorce on a daily basis, to talk about how products such as family income benefit can be a real great solution for protecting maintenance payments. So, I think it's about looking maybe in your high street, villages, towns and cities to see what other professionals are about that you could connect with, you know, such as maybe even accountants. Stacy, maybe you could tell us a bit more about how AMI look at product transfers and remortgages, because that's also, I think, another opportunity.

Yeah, and again, Shelley, very topical with what we're seeing at the moment in the mortgage market. I think typically when we have seen a market with more product transfers over remortgages, then this can often result in fewer protection conversations. So I think what it comes back to is it really highlights the importance of advisers having broader discussion, reviewing the customers' needs, not only now, but potential future needs. And I'm not talking about advising on a future need. I'm talking about helping them understand where there might be flexibility in a product,  or they might just want to have on their radar, you know, as an example, if you're thinking about starting a family and things like that can crop up in conversations with advisers because of that trusted relationship. Just making them aware that there are products that, for example, have children's critical illness cover and just helping them see more broadly the role protection plays, so it's not that siloed product.

I think the final thing I'd say on this area, Kim, is that post-Consumer Duty, we seem to have coined this phrase, don't we - write it, refer it, don't ignore it - when we've got our protection hat on. And I think that's as important today as it was when we were learning all about Consumer Duty.

Yeah, I spoke to an adviser a couple weeks ago where his ethos was that he wanted to be the one-stop shop. Kind of like a GP referring to other people knowing that he's the centralised focus for his client, but he has the network to be able to refer his client here, here, and here because he can't be a specialist in all these areas. And I just thought that was a really nice way of seeing yourself as an adviser, seeing yourself as that focal point.

Yeah, I really like that point, Kimberley. It's like how you become an adviser, that central cog, whilst also serving what your consumers need, but almost future proofing your business so that you are the first person the customer thinks of.

Thanks, Stacy and Shelley. Hopefully that’s given advisers some practical ideas on the protection opportunities with renters, and how referrals can help widen access to protection advice.

If you’ve enjoyed today’s episode, look out for Part 2, where we’ll turn to another key insight from the AMI Protection Viewpoint research — the importance of timing your protection conversations. We hope you’ll join us again for the next part of the discussion. See you next time.