While consumer appetite to take out protection cover has not been significantly affected by a drop in inflation so far, advisers are more optimistic about prospects for the start of next year.
This morning the Office for National Statistics (ONS) revealed the rate of Consumer Prices Index inflation plunged to 3.9% in November, from 4.6% in October, and marked its lowest level since September 2021.
Alan Lakey, director at Highclere Financial Services, told Health & Protection he had not noticed any difference in customer conversations about protection but added this often takes time to filter through .
“There has been an obvious impact on all forms of borrowing and this of course feeds through to reduction in protection regarding mortgages,” Lakey added.
Prices still increasing
And Katy Davies, specialist protection adviser at Henry Danell (pictured), warned it it was important to remember prices are still increasing, just at a slower rate than they were.
“But this is good news, and hopefully instils some confidence that the economy can stabilise,” Davies continued.
“I feel that now, clients I speak to want to feel good value. I am personally finding it easier to discuss income protection and critical illness, as these policies come with far more than a monetary value, with extra benefits such as physio sessions, GP access and mental health support.
“As people could receive a pay out during their lifetime, these policies could seem more relevant and immediate at a time where clients are conscious of the money in their pocket here and now, rather than what they are leaving behind.”
Optimism for 2024
Naomi Greatorex, managing director of Heath Protection, told Health & Protection this morning that she has been busy in the run-up to Christmas but could not say how much of that has been down to her meetings with new introducers or an improvement in the market.
But Greatorex did expect an increase in consumer appetite for protection cover in January.
“I’m always really busy in January because people have that New Year’s resolution of getting Christmas out of the way and then in January they feel like they’ve got jobs to do and one of those things is to sort out their protection,” Greatorex continued.
“I do find I’m busier in January with people I’ve spoken to before but have put off taking out cover.
“We’re going to do a push on people that we’ve spoken to that maybe didn’t get to take it out to say, ‘do you want to have another chat?’
“It’s really a good time to review to speak to clients who maybe haven’t got back to you over the course of the year to just revisit.”