With falling activity already resulting in in-dustry job losses it’s time to look at smart ways of making it through the storm. One simple option is to maximise revenue from the mortgage business brokers are still writing.
Adding protection revenue to mortgages could help brokers maintain their income in this bumpy patch. A life and critical illness policy can generate around £800 in commission, so writing two policies per week adds up to some £6,000 extra revenue per month.
Thankfully, selling insurance is not the onerous task it once was – after spending more than an hour filling in a mortgage application, the last thing a customer wants is to fill in a long questionnaire on insurance.
Modern methods of capturing data such as tele-underwriting whereby app-licants talk directly to insurers on the phone, free up brokers’ time. This also passes the responsibility for capturing correct information to insurers.
The processing of applications is also much simpler now compared with a few years ago. Around 80% of tele-underwritten applications go through within five days and about a third of electronic applications are processed the same day.
In terms of treating customers fairly, it is important to ensure that consumers have adequate protection in place when they take out mortgages.
Citizens Advice Bureau says many more consumers are asking it for help because they are struggling to meet mortgage repayments and the Council of Mortgage Lenders has predicted increasing repossessions in 2008.
With this in mind, plus the threat of higher unemployment if the economy doesn’t pick up soon, it’s vital that consumers get advice on protection when they take out mortgages. Once they have found their dream home, they need to be in a strong position to hang on to it.
The reality of the crunch has not been taken on board by many consumers. We recently undertook a survey which shows that 76% of adults don’t think they will suffer serious financial strife, so it’s down to brokers to ensure consumers are aware of the need for protection.