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TMPE 2021: Remortgage protection is a growing market
With remortgage activity set to grow in the coming months protection discussions need to be front and centre to ensure the disparity between purchase and remortgage cover does not continue.
Speaking at The Mortgage and Protection Event (TMPE), Andy Walton (pictured), protection propositions director at Mortgage Advice Bureau (MAB), said that there was a disparity between purchase protection and remortgage protection.
He said that remortgage protection was a “massive growing market and opportunity” pointing to recent figures which showed 700,000 fixed rate mortgages came to an end or have come to an end in 2020.
He added that there was £242bn worth of mortgages that will end or have ended during this period, and in October alone there was £44bn worth of mortgages coming to an end. In January there will be another £40bn of remortgages and products transfers that mature.
Walton said that advisers should accurately measure their protection sales across their classes of business to improve levels of mortgage protection.
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“You will change nothing if you don’t know what to change” he said.
He added that it was vital to treat every remortgage as a purchase case, and to position protection at the start of remortgage discussions.
He said that positioning protection at the start of discussions, and by focusing on value for money and whether protection that was previously bought was still fit for purpose, would encourage more people to take it up.
Walton added that advisers should look for change of circumstances, gaps in product lines and upgrades to product lines to ensure the customer was getting the best protection.
Remortgage protection even more important now
He added that remortgage discussions would be even more vital because so many two-year fixed rates that were about to mature were taken out before the pandemic.
Walton said: “When you last saw that customer it was minimum of two years ago, no one had heard of Covid-19 this time two years ago. When you last saw the customer no one had lived through a pandemic, do you honestly think their attitude to risk and protection might have changed over the past two years ago? I think so.”
Walton added that analysis by MAB of its customer bank found that 22 per cent of customers had changed something about their original mortgage at remortgage stage. Almost 40 per cent of the customer’s original fact find had changed such as the salary, arrival of children, or job.