It has been claimed that mortgage advisers are missing out on millions of pounds worth of potential commission.
Using data based on figures from the Council of Mortgage Lenders (CML), insurance provider Paymentshield has calculated that mortgage advisers as a whole experienced an estimated loss of over £18 million in commission earnings from sales of general insurance last year, from failing to provide a home insurance quote with every mortgage or remortgage.
According to average quote and conversion rates and even taking annual attrition into consideration, losses in earnings over the next five years could reach £75 million if adviser behaviour doesn’t change, the firm claimed.
James Watson, sales and marketing director at Paymentshield, said: “Advisers are working harder than ever and, with the average mortgage application taking up to 12 hours to complete, it’s no surprise that quoting for general insurance can sometimes fall by the wayside.
“Yet, bearing in mind it takes an average of just 30 minutes to complete a home insurance application, GI presents a ripe opportunity for advisers to bolster their income with very little additional time and effort, while at the same time fulfilling their duty of care by ensuring their client’s assets are adequately protected.”
According to the CML, remortgages contributed to about 35% of all mortgages in 2016, which means around £6 million in unclaimed GI commission for these applications alone.
Watson added: “With the potential of an interest rate hike on the horizon, it’s likely that the remortgage market will continue to outperform other areas as consumers shop around for low rate deals. However, when helping a client with a remortgage, mortgage advisers don’t tend to think about general insurance as the client will normally already have home insurance in place.
“However, without a conversation about their current arrangements, the adviser has no idea whether the policy they have in place is fit for purpose and could be leaving the client financially exposed, not to mention bypassing a commission opportunity.”
