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Protection values

Gordon Brown’s disingenuous Budget has attracted such criticism that there is almost no need to add to it. Far more commendable last week were the trading results of the UK’s omnipotent estate agency business Countrywide.

A phenomenal increase in profit was partly underpinned once again by some quite Olympian mortgage life insurance penetration statistics.

Not all of Countrywide’s methods and devices are transferable to other businesses, particularly at the premium end of the market, but its success in providing thousands of mortgage borrowers with valuable protection policies (regardless of whether these are from a limited panel or not) shames the rest of us.

Mortgage protection in the UK is woefully undersold and foolishly underbought. The mortgage payment protection insurance saga is not lending credibility to consumer perceptions of the product but in an age where procuration fees are rightly at an alltime high, the rank laziness and ignorance of many practitioners who are quite simply “working to their wallets” is as shocking as it is uncompliant.

Firms such as Lifesearch are doing a good job trying to assist firms in unlocking what is both a latent revenue stream and a TCF-conducive issue. Alas, I sense it would take an unholy cooling of the property market to disturb some of the more comatose brokers from their slumber.

Elsewhere, it was interesting to see two prominent industry figures moving on to pastures new.

Chris Pearson’s move to RBOS will allow him to upgrade his existing Ferrari but more meaningfully it may indicate RBOS is finally ready to emerge from what has to all intents and purposes been a three-year self-exile.

As for HBOS, if it has demonstrated anything over the past few years, it is that its talent pool is pretty cavernous, so replacing the well respected Pearson should be a formality. Birmingham Midshires has very stretching targets this year but it remains arguably the best-loved intermediary brand in the marketplace when rated on competencies such as product, speed, service and personality.

Of greater significance was Mark Chilton’s appointment at Network Data’s new lending arm, Homeowners. Chilton has an intellectual capability which should boost the fledgling lender’s development.

The two questions which immediately spring to mind are: 1) Will the new lender look to secure origination outside of its parental circumference? 2) Might this include profit-sharing participation for its supporters? The latter question is pertinent given that Network Data has been a pioneer in establishing long term value for its members via its share option awards policy on mortgage cases submitted.

Kevin Duffy is managing director of Hamptons Mortgages.


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