"I can’t believe that, after all these years, the solution to a decades-long issue is so simple."
- Robin Hyndley - Acre
The protection gap isn’t going away. For over two decades, the UK industry has been raising the alarm over the lack of uptake of the right levels of protection and debating the right approach to move the needle. It’s a sad sign that, despite the time and money spent, there’s been little measurable progress in the past 20 years.
It's easy to reach the obvious conclusion that the protection gap is both too big a problem and really difficult to solve.
While there is an element of truth to this statement, it is not entirely accurate.
Yes, it is a vast problem to overcome. The recent FCA Pure Protection Market Study highlighted that 58% of adults don’t have a protection product, and 59% of those have never considered their needs.
The 'difficult to solve' bit is not so absolute, and we should not resign ourselves to the idea of a forever gap.
The FCA concludes that the industry’s problem is about customer reach, not about the product itself.
The answer lies in better client engagement. So the question now isn’t about protection advice, we know firms excel at this, but how to ensure that 100% of mortgage clients have an informed conversation with their adviser about their need for protection.
Timing is only part of the answer
Well, timing is important. We know that mortgages are the primary driver of the protection market, so it's easy to understand why giving coverage advice in the context of the mortgage journey is so important. So, what else?
Changing mortgage adviser behaviour and reframing the conversation is what will bring about the biggest change. This is where technology-enabled workflows, prompts, and structured journeys play a critical role, not replacing adviser judgement, but enabling better quality conversations at scale and reducing reliance on individual interpretation.
Protection advice as a repeatable process
Good technology supports good processes. While brokers have a responsibility to ensure clients make informed decisions about protection, this doesn’t mean forcing a policy on every borrower.
Consider establishing a repeatable, recordable process embedded in the mortgage journey that delivers superior client outcomes, reduces regulatory burden, increases client satisfaction and supercharges revenue growth. That process involves:
- Identifying the gap - assess the need for protection for all mortgage customers. How? Take your pick: system-generated risk reports or attitude to risk documents underpinned by repeatable and transparent processes. Not everyone needs protection, but confirming, recording and auditing the 'no' to ensure it’s an assessment of need and not a default position.
- The right advice channel - By better understanding the customer, we can ensure that they are signposted to the right advice. Seamless referral of customers, without friction, ensures no one is lost in the process and that advice is provided.
- Fulfil needs - By signposting clients to the right, proven source of protection advice, good advice is provided, and good client outcomes delivered.
What does good look like? Acre has firms where 85% of mortgage cases have an associated protection case. For these clients, the need is identified and advice provided where appropriate.
We can close the protection gap. No need to wait another 20 years.
I can’t believe that, after all these years, the solution to a decades-long issue is so simple. It’s about changing adviser behaviour, improving client engagement, informing customers and solving the problem.
The data we’re seeing doesn’t lie.
