Mark Graves is head of Pink network
As an industry I think we are at the crossroads regarding what to do next about selling protection.
Clearly the mountain of facts and figures about the protection gap have not even dented the thought process of clients, who would rather live in ignorant bliss than be reminded of the consequences were their whole life to come tumbling down. That is why pet insurance sells better than protection because most people can relate to a third party but cannot deal with the emotion of becoming ill themselves.
Through television programmes we see such heart warming stories of communities coming together to support families when cancer or another devastating illness strikes at the heart of the family.
Yet we only react to illness after the event, we seem incapable of facing up to protecting our families for an event we hope never happens.
It is this reason mortgage brokers find it so incredibly hard to sell protection on a consistent basis. They are just not used to selling a product a client doesn’t want to even contemplate needing. Give most brokers a positive feedback sale like a mortgage and they will take it every time.
The easier sales are always to a person who knows someone who has become ill or lost their job. When the rumours started about Woolworths we were inundated with Woolworths employees wanting Income Protection, the lucky ones got accepted before insurers stopped selling to them.
We talk about making policies easier to understand or cheaper or adding in more benefits, but none of these points come close to solving the issues. So what can we do? Firstly I think we need to acknowledge selling IP is a different skill from one required to provide advice on mortgages. Only about 20% of people in our industry that see protection as a regular client review – you need to be passionate about the products to re-visit a client every year.
Mortgage brokers love broking mortgages; some actually enjoy selling protection, but more than a few sell it under duress because they feel morally obligated to. We can at least help make the journey less stressful by adapting the sales process, making income protection feel part of the mortgage and feature as a mortgage benefit rather than a protection one. Alternatively, mortgage brokers can find a business partner who lives and breathes protection and can provide their clients with the protection advice they either do not want to give or do not have time to.
Within Pink network we have been working with our top firms to encourage and support them to recruit protection specialists – rather than trying to bolt on a protection sale the end of a mortgage, which is a much better solution for everyone. All the training and product knowledge in the world does not come close to replacing a passion and desire to sell protection, it is a vocation.
They say ignorance is bliss, but where protection is concerned this can be costly. Especially when someone comes knocking at your door with a negligence claim after they have sought legal advice and realised you have not done your duty of client care. Taking a shortcut due to time constraints and a lack of motivation will ultimately come back to haunt you. I cannot predict when, but probably once the PPI ambulance chasers have run their course and looking for a new carcass to feast on.