Protection Pulse: Have sales increased during 2015?

How are mortgage-related sales faring?

We are continuing to monitor the relationship between the mortgage market and protection sales. During 2014 mortgage related sales were tracking at around 33% of the overall market both by premium volumes and numbers of policies sold.

In the first half of 2015, the numbers are around 28% of the total by number of policies and 29% by premium, significantly down on 2014. This may be attributable in part to the decline in restricted advice sales. For the half year 2015, mortgage related sales as a proportion of overall sales are down by over 10% on the same period in 2014.

So what has been happening in the mortgage market during the first half of the year? The number of homeowner loans for house purchase loans (including loans for first-time buyers and home movers) fell in the first half of 2015 compared with the same period in 2014, down by about 9% (see Table eleven).

This would almost certainly have affected mortgage-related sales of protection business, which also fell by a similar figure in 2015 vs. 2014.

The picture for buy-to-let loans (for house purchase and re-mortgage) has by contrast been very rosy in the first half of this year compared with last year: these figures are up by nearly 20%.

Remortgage loans rose by about 2% for the first half year, compared with the same period in 2014. Overall, the number of loans in the first half of the year fell by about 1.5% compared with the same period last year.

Given that not everyone will take out a protection policy for each of the above events, the picture is quite difficult to piece together, but it seems fair to say that the sales of mortgage-related sales in the first half year have almost certainly been adversely affected by the fall in homeowner loans mentioned above.

Summary

Any hopes of seeing a positive start to the year as we saw in 2014, quickly receded with overall volumes down by 3.5% in Q1.

While the volumes in Q2 rallied somewhat, sales in the first half of the year are still down overall by 1.2%, which is really disappointing.

The only positive message we can take from the year so far, is the continued rise in income protection sales, which seems to at last indicate some real growth in the market.