News Review: General Insurance


Are we heading for a painful recovery? by


Kevin Paterson, sales and marketing director, Assurant Intermediary


Surprising news from the BBc last month: the recession made the average household better off. and guess what? now that we’re supposedly over the worst in terms of the downturn, the positive impact has gone into reverse. think tank capital


economics advises that real incomes have been falling this year as earnings flatten out and the cost of living has started to rise. the average family experienced a 1% drop in its spending power and with the effects of the Budget


changes looming, they’re probably looking at a further 1% dent in their net income. Your


clients are


undoubtedly going to be scrutinising every penny of expenditure,


particularly


when it comes to their insurance policies. the price comparison site, moneysupermarket.com, issued a press release last month claiming that homeowners could be wasting on average £132 per household by sticking with their existing home insurance provider instead of shopping around for a better deal. their research indicates more than a quarter of homeowners automatically renew with their existing insurer. now moneysupermarket.


TAPPING UP THE RENTAL MARKET


The football frenzy of the World Cup is over for another four years. I’m guessing the sports pages will be turning their attention to the transfer market again and gossiping about who is tapping up who. When it comes to tapping up, there’s a real opportunity for intermediaries to get more business out of the rental market.


News leaked out last month that cabinet minis- ters have been ordered to plan for swingeing cuts of day-to-day departmental budgets of up to 40%. This has put a huge question mark over hundreds of thousands of jobs in the public sector. This is bound to have a knock-on effect on the hundreds of companies in the private sector that provide services to government departments.


I just wonder how many potential buyers are going to be dissuaded from making any move given the prevailing uncertainty on job security. This could give further boost to the rental market and represents a significant market for intermedi- aries to target with protection products. There are short-term income protection and ASU products


12 mortgage introducer AUGUST 2010


out there which also enable renters to build in cover for other outgoings and lifestyle options such as satellite TV subscriptions and gym mem- berships. These are fully portable and offer flexible cover for policyholders. It doesn’t matter whether you’re buying or renting, most people want to be sure they can keep a roof over their heads when times get tough. And most rental agreements don’t include cover for the renters’ possessions, so there is an opportunity to cross-sell contents cover with add-ons such as accidental damage or legal expenses.


The Association of Residential Lettings Agents has 3,500 member offices throughout the UK. It makes sense to get in touch and start building a potentially lucrative new income stream.


And don’t ignore people on low-cost and


shared home ownership schemes. I would argue that these buyers are possibly at the more vulner- able end of the scale when it comes to needing a safety-net to help them protect the asset they’re working so hard to build.


com claims that shopping around for the best deal is quick and easy. However, it isn’t just a question of putting a few details into their search engine and looking at the best price. Finding the right policy that meets their needs takes time and consideration. i personally believe that intermediaries have a golden opportunity to further engage with their clients on buildings and contents cover. if you initiated their policy, you know when it is up for renewal. don’t wait until the week before to contact your customer and offer assistance in the renewal process. get in touch a couple of months before with two or three quotes based on what you already know about them, and suggest a


face-to-face visit to review their requirements to enable you to shop around on their behalf. although you may not have arranged their B&c cover, you know when they completed on the mortgage and when they’re likely to be renewing. this provides you another opportunity to get back in touch with them. in my experience,


providing an answer to a problem they haven’t thought about is an approach welcomed by many clients.


THE OLD LADY OF THREADNEEDLE STREET KEEPS US ON HOLD


We shouldn’t be surprised that the Bank of England kept interest rates on hold for the sixteenth consecutive month in July. However, this doesn’t mean it’s going to be any more affordable for people to borrow and, there is ultimately only one direction that interest rates can go. Add to that prospect the fact that VAT is going up in January and other measures announced in the emergency Budget will start to bit, and many households are going to be stretched over the next 12-18 months. If you haven’t been in touch with your clients recently, now is as good a time as any to offer them a free consultation to review their current financial outgoings and see if you can get them a better deal to help see them through.


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