Mortgage Advice Bureau (MAB) reported a 21% increase in revenue through protection and general insurance commission during the first six months of 2023.
The advice firm reported £44.9m income through insurance commission from January to June, up from £37.2m in the same period of 2022.
However pre-tax profits dipped by 25% to £7.6m from £10.1m during the same period a year earlier, as a result of struggles in the housing market continuing from the disastrous mini-budget.
The board noted that once inflation is under control and the Bank of England base rate has peaked or started to fall back, it expected to see demand and activity strengthen again and was optimistic for the rest of the year.
Business protection proposition
Insurance commission remained at 38% of income for the MAB group but the firm emphasised the importance of protection to its offering.
Having bought a controlling stake in protection adviser Vita Financial, MAB said the firm was launching a “new proposition to access the largely untapped UK business protection market and leverage the group’s significant distribution in this area”.
It added that plans to leverage the Auxilium specialist protection platform servicing directly authorised firms which it bought in December have “progressed well”.
Overall, adviser numbers at MAB were down 6% to 2,109 at 30 June compared to 2,254 at the end of December, but had rebounded slightly to 2,114 at 22 September.
However, the firm added it was seeing a strong pipeline of directly authorised firms looking to join as a result of the increasing regulation and consumer protection.
‘Exceptionally challenging year’
While the current situation was tough, the firm said it was feeling positive for when economic conditions improved.
“Following a difficult Q1 2023, with activity levels still affected by the fall in mortgage approvals post the September 2022 mini-budget, we saw an improvement in Q2 2023 and ended the half year modestly ahead of the board’s original expectations,” the firm said.
“However, market conditions have toughened again in Q3 2023, impacting both purchase and re-financing activity.”
Chief executive Peter Brodnicki added: “It has been an exceptionally challenging year with interest rates continuing to rise.
“This has clearly impacted consumer confidence, resulting in many people deciding to delay their house purchase, while for others there is understandably a reduced level of urgency.
“This has created a toughening market for mortgage brokers as the year has progressed, compounding the damaging impact of the mini-budget last September.
“However, against this difficult backdrop I am pleased with how MAB has significantly outperformed the market, with the organic business performing above expectations.
“To ensure we are in the best possible shape when market conditions improve we have continued to carefully invest across the entire group to deliver optimal business and adviser efficiency.”