Earning extra revenue from GI
James Watson is sales and marketing director at Paymentshield
Across many industries, there’s a sense that time has never been more precious – and this could not be truer for mortgage advisers. With a number of reports, including recent research from Prudential, finding that advisers are now working longer hours than ever before, using their time effectively is essential for the savvy mortgage adviser.
The average mortgage application takes 12 hours which really does highlight the resource, effort and knowledge – or blood, sweat and tears – that go into a mortgage application. After putting in this time to get a mortgage application through, it’s understandable that general insurance can sometimes fall to the bottom of the pile and get bypassed. By the time umpteen pages have been read and signed, the patience and stamina of both adviser and client can wear a little thin.
When a client takes out a mortgage they will be expected by the mortgage lender to have basic buildings insurance in place before exchange can take place in order to protect the lender’s investment. However, they won’t necessarily understand all the options available in order to ensure they are adequately protecting themselves. There is, therefore, a strong argument that mortgage advisers have a moral obligation to educate their clients about general insurance and help ensure that their clients are properly protected.
When you take into account that the average time it takes to complete a home insurance application is just 30 minutes, compared to that of a mortgage application, GI presents an opportunity to provide an all-encompassing service for your clients for very little additional time and effort. Over a year, advisers could process 24 home insurance policies – just two a month – in the same time it takes to complete just one mortgage application.
Put simply, if you were to spend 12 hours on home insurance and complete 24 applications in a year you could be earning the equivalent of £3.13 per minute compared to just £1.40 per minute for a mortgage. That’s because, based on the average mortgage price and procurement fee, advisers will earn around £1,000, per mortgage application, while spending the same 12 hours submitting two home Paymentshield home insurance policies per month could result in earnings of £2,257 over the course of a year. It’s also worth noting that home insurance commission continues to be paid for as long as the policy is renewed, which means that if you continued to submit two policies a month over a three year period, those policies could earn you an extra £11,885.
These mortgage fees can, of course, be multiplied significantly for more expensive properties but, then again, so can the insurance premiums – larger properties make for more expensive policies. Of course, mortgage applications are always going to be your bread and butter, but it’s worth considering that general insurance presents huge opportunity to earn more per hour by comparison.
In just 30 minutes, advisers can accrue valuable extra income from general insurance– which all adds up – and ensure that their clients are comprehensively covered in terms of insurance. Besides, 30 minutes is nothing if it saves your client potentially hundreds or even thousands of pounds in the future.