Nearly 50 per cent of advisers believe income protection and mortgage payment protection insurance sales will increase if there are further Bank of England base rate rises, according to Prudential.
The insurer’s IFA Confidence Index, published today, found 47 per cent of advisers believe recent base rate rises and the threat of more to come will drive sales of income protection and MPPI and also shows 51 per cent of advisers believe their clients are underinsured.
Over half of advisers say the current market is lacking in product innovation and 67 per cent say there are not enough protection products in the market.
Pru says, with these results in mind and while they may believe their clients are under insured, advisers still anticipate strong sales over the coming 12 months for key protection products.
Two-thirds of IFAs expect term insurance to be amongst the highest selling protection products, with CI ranked number two, although a significant 53 per cent believe it will take the top spot. Income protection was viewed as the third most likely product to generate high sales.
Insurance business director Angus Maciver says the fact so many advisers believe their clients are under-insured underlines the huge potential in this market.
He says: “Hopefully the fact that many believe rising interest rates will increase demand for protection provides the necessary spur to have a conversation with these clients about boosting their cover.
“And obviously there is still innovation required from more suppliers to help stimulate interest and adequately cover all the needs in the market.”