Intermediaries heed diversification message

Charterhouse Research, the specialist financial market research consultancy, today reveals that the outlook for mortgage-related general insurance sales looks positive.

Mortgage Intermediaries The Regulated Environment has been tracking the intermediary market in the face of regulatory changes via 100 interviews per month with intermediaries.

House insurance and protection are natural partners to a mortgage and clearly a valuable means for intermediaries to increase revenue streams. It appears that intermediaries have taken this message on board, with 91% authorised to advise on general insurance.

Intermediaries are evenly split between directly authorised and those with appointed representative status. The research shows that many appointed representatives are not comfortable with their first choice of authorisation status – nearly a third (32%) of appointed representatives looking to change, giving them more freedom to offer customers a wider range of products. In contrast, just 5% of the directly authorised intermediaries are considering a status switch.

There is widespread optimism amongst intermediaries that the volume of general insurance business will increase; 49% of respondents expect their business levels to rise while only 5% of intermediaries anticipate a decrease in general insurance business.

Intermediaries are most optimistic about the outlook for life insurance sales 57% of those questioned expected volumes to increase and only 1% predicated a decrease.

Respondents were also optimistic about Mortgage Payment Protection Insurance, with just under half (47%) anticipating growth. The picture for critical illness is more mixed with 42% predicting an increase in business volume but 17% anticipating a drop.

Price and rates received the highest level of spontaneous mentions as reasons for selecting insurance providers. Other key considerations are quality and speed of service, particularly the simplicity of submitting applications; and product quality and range.

Julie Irwin, director at Charterhouse Research, says: “Talking to customers about the range of protection available to them is a natural extension to providing mortgage advice. Although rates and price remain a dominant driver of provider choice, the importance of good and efficient service shouldnt be underestimated, particularly in an environment where the mortgage sales process has been considerably lengthened.”