Protection challenger Guardian has found that advisers are seeing a shift in consumer attitude towards protection as a result of Coronavirus.
Of the 410 advisers surveyed over the last three months by the life and critical illness company, the majority said they are experiencing a change in client behaviour, with 75% reporting an increased willingness to talk about protection.
Advisers said the crisis has prompted an increase in clients actively seeking protection advice. A view echoed by Kevin Carr, co-chair of the Income Protection Task Force.
Carr said in a recent article on Morningstar: “At the start of the pandemic the protection industry saw a significant increase in enquiries, with some adviser firms reporting three- to four-fold increases, which levelled out as longer term financial concerns and a dip in the mortgage market took hold.”
Forty per cent had seen an increase in protection enquiries from existing clients and 38% had seen an increase from new clients.
This shift in consumer behaviour is an important development for the protection industry and comes as advisers seek to counter lost income as a result of Coronavirus. 56% of advisers said they expected their overall revenue to fall as a result of the crisis. Nearly two thirds (66%) said they would be looking for new ways to earn income and 67% said they thought protection sales would grow within their business.
Commenting on the findings, Cavendish Ware associate director, Roy McLoughlin, said: “The virus has pushed protection insurance higher up the agenda for many clients. I am seeing this personally within my own business and am hearing the same during discussions at the Protection Distributors’ Group. It seems that in this challenging situation, people are thinking more about their own mortality. What is also welcome is that for the first time in my memory, a Chancellor of the Exchequer has mentioned protection in his speeches, bringing it to the attention of the masses.”
Echoing the trend, Paradigm Head of Protection, Mike Allison, said: “The impact of Coronavirus seems to have caused a shift in peoples’ risk appetites as well as awareness of the support available to them. At Paradigm, evidence suggests that more clients are taking the time to understand the nuances between protection products and take on board differences in quality between providers, an excellent reason for firms to offer a whole of market approach. Ultimately this is a good thing for the advice industry as this increased appetite to talk about risk helps us to better serve our customers.”