Golden insurance opportunity for advisers

By Lauren Bagley

If there was ever a time to discuss home insurance, it’s certainly good time now, given so many of your remortgaging clients will likely have held their existing insurance policies for multiple years and could be paying more than what they should.

Industry data shows that over £183bn worth of residential mortgages will expire by the end of 2021, and as we head into Autumn, the remortgage and product transfer opportunity is expected to be strong as we switch focus from an extremely busy purchase market in the first half of this year.

The FCA’s well-documented general insurance pricing practices market study found the home and motor insurance markets are not working well for all consumers. Customers are often penalised for their loyalty and may well need your help and guidance in ensuring they are not caught in the loyalty trap.

This led to new regulations being introduced by the regulator that come in at the end of the year. The FCA will ban insurers from artificially discounting new business premiums with the intent to hike them in subsequent renewals.

The FCA’s analysis estimated that the insurance industry gained £1.2bn from six million policy holders through price walking in 2018 and it predicts that the new ban will save customers £4.2bn during the first ten years following its introduction in January 2022.

The role of an adviser to inform and educate about insurance has never been more important and, as this wave of remortgaging clients start to reengage, there’s a golden opportunity to demonstrate the value of advice, ensure fair value and potentially save your clients’ money on their existing insurance.

So what do you need to be considering when reviewing you remortgaging customers insurance?

1. Educate your clients to consider more than just price

As the name suggests, price comparison sites are largely useful for comparing on price. Although, understandably, price is the dominant factor of any conversation, it’s also vital to weigh up whether a policy is offering good value.

You can use Uinsure’s Defaqto Compare tool to compare policies available across the market and this will instantly highlight gaps in cover. This, in turn, allows you to explain how certain policies do or do not meet the client’s needs and steer the conversation away from base price to best value. 

2. Introduce a GI conversation early on

Ask for a copy of your clients existing home insurance schedule as an addition to any other documents you require as part of your remortgage advice process.

3. Simply explain what price walking means and how they could be paying more than what they should

The ban on price walking will come into force from January 2022, and so ahead of rules being implemented, it’s a really important time to discuss with clients who have held insurance policies for multiple years to review their needs.

Want to know more? Uinsure is currently running a series of How the Pros do it workshops to help give advisers this skillset and confidence to offer general insurance to more of their clients more often.

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