January and February have been interesting months for the protection market. We hear that sales are down across the industry and indeed our own sales were down a little compared to the same period last year.
This was, of course, largely expected following the price increases which were applied to most products following the gender and tax changes which took effect at the end of last year. In fact some commentators predicted a fall in new protection sales of as much as 40 per cent for 2013.
However, March has already seen a huge upturn with sales running in excess of 50 per cent more than February and an increase on March 2012.
This increase is perhaps down to a combination of reasons.
In terms of general market drivers the protection market is cyclical and is relatively closely linked to the mortgage market, which always picks up in the spring. Likewise March also sees the build up to end of year tax planning for a number of clients, which is often also the time to review and action their protection needs.
The fall-out from December’s price increases is also settling down. Most people who buy protection tend to do so fairly soon after shopping around for a few quotes, which means anyone who may have been put off from buying because of changes have had the time to see sense, and those shopping around now aren’t aware of what the prices were three 3 months ago.
Internally, we have restructured several aspects of our business and continue to believe that the protection market is a great opportunity as long as the job is done in the right way. One of the key changes we’ve made is simply to review our opening hours. Clients want to deal with things when it suits them and more often this falls outside of traditional IFA working hours. So if a client wants to speak to an adviser at 8:30pm on a Tuesday night, they can. If we can’t speak to them, they might just speak to someone else instead.
So for us, and we hope across the industry, protection sales are indeed on the march.
Damian O’Connor is Principal of Roxburgh Financial Management