There is a generational difference when it comes to views of the importance of protection insurance, with younger generations viewing it as more important than older ones, according to research from the Association of Mortgage Intermediaries (AMI).
Andrew Montlake, chairman of the AMI, said: ”Our research reinforces last year’s findings that show that younger generations – Generation Z in particular, see protection as being more important than older groups. – especially income protection.”
He was speaking at the online launch today of the AMI fifth Protection Viewpoint report titled – Making Protection Personal .
The report found that 13% of Gen Z (born between 1997 and 2021) and 15% of Millennials (born between 1981 and 1996) have IP compared to just 5% of Gen X (born between 1964 and 1980).
The AMI research could help advisers think about the potential for different approaches for different demographics,.
Montlake said: “While many younger consumers may not yet be at the state in their lives where they’re looking to buy a house, they are the mortgage customers of the future.
“Its important for us to help shape their perceptions of protection and advice at an early stage.”
There was also a difference when it came to seeking advice as Vicky Jeffries, market development director for Legal & General: “Interestingly the younger generation favoured the use of a specialist.
“Could this be attributed to an increased online and social media presence of this type of advisor?”
In last year’s report, it was said that just one in three advisors had an online presence. This year’s report concurs in the changes in customer behaviour.
“Seemingly a lack of online presence and social media through advised distribution means that customers are seeking their own solutions with less understanding of the value of advice.
“This is a clear opportunity.”
Nowhere near
But despite the greater interest from the younger generation there is still far to go.
Jo Miller, MD and board chairwoman of IPTF, said in the report: “It is encouraging that the proportion of Gen Z with IP is higher than the overall figure – but the figures are still nowhere near where they need to be.”
Looking at younger generations, the report also found: that more young people – 65% Gen Z and 70% of Millennials – think it’s important to have income protection than older generations – 48% of Gen X and 39% of Boomers (born between 1946 and 1963).
Another difference was that younger protection holders seemed more engaged with their protection, reviewing their cover more frequently than older people.
According to the report, 30% of Gen Z and 36% of Millennials have reviewed their cover in the last six months compared to 17% of Gen X and 13% of Boomers .
The report said that 22% of Gen X and 31% of Boomers have never reviewed their cover compared to just 9% of Gen Z and 8% of Millennials.
Encouraging picture
In a separate statement John Scrivens, head of sales at Stonebridge, said: “The generational divide presents in many, often surprising, ways across all aspects of everyday life.
“It is heartening, for once, to see it manifest so positively.
“The AMI Protection Viewpoint for 2024 shows again that more young people (65% Gen Z and 70% of Millennials) think it’s important to have income protection than older generations (48% of Gen X and 39% of Baby Boomers).
“When it comes to life insurance that jumps to 75% Gen Z and 76% of Millennials – compared with 62% of Gen X and 55% of Baby Boomers.
“This paints an encouraging picture for closing the protection gap in the future.
“The importance of empathetic, timely, productive conversations about protection cannot be overstated.
“Working in our sector, we see the fallout of an exemption in a ‘cheap’ self-serve policy not fully understood or the realisation of the need for protection only dawning after the worst has already happened. We don’t want that for anyone.
“We see the influence of ‘youth’ language on everyday vocabulary, wouldn’t it be great to see a transference of younger generations’ openness to accepting future potential vulnerability adopted across the generations that came before them?
“Until then, at Stonebridge we’ll continue to provide suitable training and support to enable our 1,200 advisers to have protection conversations with as many clients as possible, regardless of their age.”
