The Association of Mortgage Intermediaries (AMI) has launched Making Protection Personal, its fifth Protection Viewpoint Report and has issued a four-point action plan designed to help advisers deal with the changing protection environment.

The report, created in partnership with Royal London and Legal & General, highlights the need for a stronger customer focus, addressing individual needs and aspirations.

AMI’s report shows that 28% of consumers believe it should take no more than 48 hours from applying for protection to having it in place for someone with no complex health conditions, and a further 25% expect it to take less than a week.

Meanwhile, 21% of Gen Z expect a 48-hour turnaround compared to 31% of Gen X.

Regarding claims, 44% of consumers expect a decision within a week, and 27% anticipate receiving payment in their bank account within that timeframe.

AMI explored advisers’ perspectives on insurer service levels for the first time. There was no clear consensus on whether service levels have improved or declined over the past one to two years. The most diverse experiences were around underwriting. While 28% of advisers reported a decline in service, 20% saw improvements. For claims handling, 16% observed worsening service levels, while 12% noted better performance.

The report highlights positive trends in customer retention, with a growing number of advisers actively working to keep protection policies in force. Currently, 65% of advisers are proactively doing something, up from 60% in 2023, with over half (56%) conducting regular policy reviews, and 16% reminding clients of product flexibility and payment deferral options. Among those taking these steps, 44% have seen improvements in customer retention.

Although one-third (33%) of consumers recalled receiving an annual statement from their insurer, just 16% said it prompted them to review their coverage. Despite consumers believing protection should be reviewed every 13.6 months on average, just 45% with protection have done so in the past year, and 17% have never reviewed their protection at all. Reasons for not reviewing include unchanged personal circumstances (33%), a lack of consideration (25%), and scepticism about the benefits (15%).

While annual statements have proved to be a prompt to encourage some consumers to review their policies, many are seeking just the basic policy information from an annual statement. Details about how many claims the insurer has paid out sat at the bottom of the list (14% stated they wanted it on their annual statement). The top information requested from annual statements includes:

 Meanwhile, 44% of consumers feel responsible for prompting a review of their protection, while 28% (rising to 32% among Gen Z) think insurers should take the lead. Among existing policyholders, 22% expect advisers to prompt reviews. Younger consumers, particularly Gen Z (27%) and Millennials (24%), are more likely to place this responsibility on advisers.

30% of advisers believe insurers should prompt consumers to review their protection needs, though a greater number (42%) disagree. The majority of advisers (83%) see it as their role to encourage regular reviews.

Robert Sinclair, AMI’s chief executive, said: “This year’s report underscores the growing role advisers play in keeping protection policies active, with more clients benefitting from regular reviews and tailored advice.

“However, the data also highlights areas where the industry can improve, particularly in meeting consumer expectations around policy issuance and claims processing. By addressing these gaps and enhancing communication, we can ensure more consumers are protected when they need it most.

“Importantly, there’s room for us, as providers, to support advisers when it comes to managing client expectations. It’s a challenging but exciting time for the industry. And I believe that by continuing to listen to our clients and adapting to their evolving needs, we can make significant progress.”

Carrie Johnson, protection director at Royal London said: “It’s important to hear from consumers on how we are doing, and we’re always keen to listen to this feedback and to continue to improve. While technology has undoubtedly enabled us to offer more sophisticated and personalised cover, along with a broader range of value-added services, it can also create complexity. We need to remember protection products support customers at the most vulnerable times in their lives, so it’s crucial we treat them fairly and quickly when they need us.”

NETWORK VIEW

John Scrivens, head of sales at Stonebridge, stated: “The generational divide presents in many, often surprising, ways across all aspects of everyday life. It is heartening, for once, to see it manifest so positively. The AMI Protection Viewpoint for 2024 shows again that more young people (65% Gen Z and 70% of Millennials) think it’s important to have income protection than older generations (48% of Gen X and 39% of Baby Boomers).

“When it comes to life insurance that jumps to 75% Gen Z and 76% of Millennials – compared with 62% of Gen X and 55% of Baby Boomers.

“This paints an encouraging picture for closing the protection gap in the future. The importance of empathetic, timely, productive conversations about protection cannot be overstated. Working in our sector, we see the fallout of an exemption in a ‘cheap’ self-serve policy not fully understood or the realisation of the need for protection only dawning after the worst has already happened. We don’t want that for anyone.

“We see the influence of ‘youth’ language on everyday vocabulary, wouldn’t it be great to see a transference of younger generations’ openness to accepting future potential vulnerability adopted across the generations that came before them?

“Until then, at Stonebridge we’ll continue to provide suitable training and support to enable our 1,200 advisers to have protection conversations with as many clients as possible, regardless of their age.”

The new AMI four-point Action Plan: Following this research and an additional community group study with 16 participants, AMI has devised the following four action points to help advisers and insurers build more understanding and empathy with clients and potential clients: 1 – Build in a human element upfront – take time to understand personal circumstances and situations before explaining products 2 – Make products easy and accessible – avoid jargon and find ways to make them easy to understand 3 – Allow clients to feel in control – give them time to think about them, research them and ask additional questions 4 – Focus on the positives – highlight how the products can provide help in the worst situations, share examples of this and reassure clients that they have real value.