05 WINTER PROTECT NEWSLETTER Continued on next page... here. This is just as important for wealth clients too, something brought to the fore by potential changes to IHT laid out in the October Budget. Mortgage and Protection Outlook for 2025 I wrote in this newsletter last year that the mortgage market had been unpredictable, and that it would be far from stable in 2024. Perhaps we didn’t see Lenders moving interest rates so sharply downwards without base rate cuts, but that certainly continued to add to the challenges for advisers in this space. What we do know is that the mortgage market will be significantly different again in 2025, if not solely for the sheer volume of maturities - believed to be around £400bn – the biggest ever figure. Most commentators see a modest rise in the market from this years’ predicted £230bn to perhaps £260bn. to general cost of living rises, however, the wide choice of Providers we now offer is helping to provide clients with some quality products at decent pricing levels. Many firms are using signposting for GI now too, and we have several options for this. We have seen a great performance from Income Protection (IP) sales this year. Individual new IP business premiums are at an all-time high, stimulated in part at least from younger customers, many of whom see tremendous value in IP. If other research is to be heeded, they also value independent advice to consider purchasing it. Many younger purchasers of IP, according to the 2024 AMI Protection Viewpoint, have witnessed the issues of their parents suffering reduced or no income, and are therefore more amenable to this sort of advice as opposed to Life and CI. Firms may need to tailor their marketing activities to reach these younger audiences. Two years ago, the Income Protection Task Force (IPTF) had a goal to double sales within three years, and we can applaud their efforts in educating intermediaries, demonstrating value and ultimately supporting more advisers to talk about protecting income with confidence. While IP still only represents a relatively small proportion of overall protection sales, it feels like momentum is growing and our IP sales within Paradigm this year have been nothing short of spectacular. From a Paradigm Protect point of view, I’m delighted to say that we are bucking the trend for overall protection sales this year, being ahead of last year’s numbers in a declining marketplace, so as ever, a big thank you to all who have supported us. What do Consumers think of us? The AMI Protection Viewpoint report once again gives some interesting insights into what customers are thinking; some of the key takeaways are: • Younger protection holders seem more engaged with their protection, reviewing their cover more frequently than older Protection and mortgage advice are inextricably linked, and so what the mortgage market does is important in either dampening protection sales or opening advice opportunities. This year, in the H1 at least, is a reduction in protection sales again – perhaps down to challenges in the mortgage market or the reduction in nonadvised businesses that accounted for half of new term sales in 2023. This could be due to the lack of client contact as a result of the mortgage market and workloads; indeed, either way, protection sales have suffered. In terms of Life and associated covers, of course, commercially it makes sense to review a client’s needs every time the opportunity arises - whether it be Remortgage or Product Transfer. This includes General Insurance (GI), and we are seeing Buildings and Contents Cover Premiums rise at a pretty strong rate due
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