"You’re better off having ASU than no cover if you can’t afford long-term protection products."
- Geoff Hall, Chairman at Berkeley Alexander
Berkeley Alexander recently launched SafeGuard Protect, a new modular Accident, Sickness & Unemployment (ASU) policy that provides Personal Accident (PA), Income Protection (IP), and mortgage/rent protection to combat the financial implications of ill-health, injury, and/or unemployment. These modules have their own schedule and policy wordings, but customers can access details simultaneously with a combined online quote and buy process.
There’s a maximum monthly benefit of £2,000 or 65% in gross income – customers can claim under multiple modules subject to that 65% rule.
READ MORE: Berkeley Alexander set to disrupt the market with new PA & ASU offering
Speaking with Protection Reporter, Geoff Hall, Chairman of Berkeley Alexander, said “It’s taken two years of hard work to get to this point and, in my opinion, SafeGuard Protect is substantially different to what was on the market pre-pandemic.” In the past, Berkeley Alexander has launched various ASU policies including MortgageSafe and Mortgage Lifeline in 2001 & 2014 respectively.
MortgageSafe provided premiums based on the type of cover, deferred period, and length of time benefits would be paid. Available to new & existing customers, MortgageSafe had either 30 or 60-day deferred period with a maximum monthly benefit of £1,500.
Berkeley Alexander’s Mortgage Lifeline trumped this product by providing age-related premiums with a maximum monthly benefit of £1,750 or up to 150% of a customer’s monthly mortgage payment – customers aged 18-64 from the outset qualified for this policy. Provision for claims continued beyond retirement age with no limit to benefits based on income.
“During the pandemic, no underwriter had any experience on how to rate and what was going to happen, therefore they understandably all withdrew.”
“ASU was withdrawn before & during the pandemic for obvious reasons,” Geoff explained, “but we retained a relationship with our underwriter, Canopious. In 2022, they said that COVID-19 had passed far enough, and they could consider returning to the ASU market.”
Discussing key product priorities, Geoff said “It was important to us that we could cover renters as well as homeowners on the same terms, because too often there’s one rate for a mortgage and one rate for rent. We wanted to tick as many boxes as possible, whilst still providing longevity.”
“There’s constantly stories about people who’re stuck renting because they can’t afford to buy.”
Pre-pandemic, Berkeley Alexander informed advisers about opportunities for ASU amongst renters who want to buy – inevitably supporting landlords. If renters don’t have protection in place, what happens if they’re unable to work due to ill-health or injury? “Well, now you’re in a position where you can protect the landlord as well as the rent; it’s a double whammy,” he said.
When asked if the rental market was underserved, Geoff explained that there have been rent protection policies in the past but not as many on the market at the moment; “I suspect that market has been left for IP which is always more expensive than what we call a committed payment policy. I think there’s always been a price point that could prevent some people from buying it.” Alongside a lack of products, Geoff believes advisers aren’t proactive in the rental market.
He explained “As always in the mortgage market, there are different types of advisers. Those too busy looking after their existing book to even think about taking on new customers and those actively building a customer base.
“A lot of advisers are linked to estate agents as they often sell rentals too. There’s a massive opportunity to help customers that rent as well as ‘adult children’ living with them. I would expect an adviser looking after those mortgages to be talking to their customer about their whole lifestyle.”
“ASU is a stepping stone to getting involved in the protection market, to start understanding it.”
Geoff highlighted that ASU’s non-underwritten nature makes it a ‘good starter’. “Ever since we’ve been doing ASU, we’ve compared the virtues of non-underwritten against full-term underwritten products. I’ve spoken to advisers that only sell IP because it protects customers up to the age of 65, but what if they can’t afford the premium?” he asked.
“These customers are better off with some cover rather than an adviser saying, shame you can’t afford long-term protection, never mind.”
When asked if Berkeley Alexander had any strategic enhancements planned for SafeGuard Protect, Geoff confirmed nothing immediate; “We looked at various added-value benefits we could build into the product including needlestick injury support, if someone contracted human immunodeficiency virus (HIV) or Hepatitis from a used needle.”
But these services come at additional cost, “albeit not a huge cost but they do add cost and make the product more complicated.” Geoff explained, “We’ll be assessing demand to determine if there’s a need for added-value services on an optional basis, it’s a decision for us down the line but we need to find that balance.”
When asked which service Berkeley Alexander would add if there wasn’t associated cost, Geoff noted that adults in the UK often struggle to access GP services, “If there was a way of building in GP services over the phone, that’d be good because it’s not only beneficial for customers but also helps protect providers against future claims.”
