Paula Pearson , Strategic Account Manager , Aviva

Paula Pearson , Strategic Account Manager at Aviva , shares her thoughts on how an obsession with mortgage customers is hindering the protection pipeline .

In 2022-23 , there were around 874,000 recent first-time buyers in England , around 80,000 fewer compared to 2020-211 . The private rented sector makes up 4.6 million ( about 19 % of households ) 2 . The lower rate of first-time buyers means more people are renting for longer . The private rental market represents a great opportunity for advisers to talk about protection . With the purchase of a first home not as much of a life trigger as it previously was , advisers are facing the challenge of creating new opportunities . Is the obsession with mortgages as the only route for protection conversations on its way out ?

Future pipeline of customers Thirty percent of private renters had dependent children in 2022-233 . This means that just under a third of renters have someone relying on them for a stable lifestyle . Children are a known life trigger for people seeking protection advice , and rental market customers are no different , needing guidance to the options available .

Aviva ’ s research into Gen Z – those born between 1997 and 2012 ( ages 12 to 27 in 2024 ) – shows that currently , 49 % of Gen Z are renting , 24 % are homeowners and 19 % are living rent free . Whilst 75 % of Gen Z are not currently homeowners , they are optimistic about home ownership . When asked , “ when do you expect to buy a house ?” 55 % of Gen Z non-homeowners said in their 20s or 30s , with a further 25 % wanting to buy but are not sure when . Only 19 % were unsure if they ever will buy a home .

With the next generation of homeowners staying longer in rented homes , research found renters have a particular fear of the future4 . This presents an opportunity to champion products which provide flexible security . The younger that income protection is taken out the easier it is to obtain cover ; as an industry it is vital we explore new ways of reaching out to new customers .

So how can advisers reach out to renters ? One suggestion is to team up with your local lettings agent and work together to support their customers by introducing tenant protection into their business . From young singles , to couples , to families and older singles the protection gap exists . Having a protection conversation as part of securing a rental property can help support financial resilience . A face-to-face meeting with potential renters before they agree to lease a property is recommended , but if this isn ’ t possible , work with your local letting agents to instead email prospective rental customers .

Another suggestion is for financial advisers to speak to their current customers who are landlords about referring their tenants for advice about protection . Policies such as income protection are linked to earnings so can provide tenants a safety net in case of illness or injury . It ’ s not just mortgage clients who need this cover , renters do too .

For Gen Z specifically , family are the essential trusted resource for guidance , and , when prompted , financial-led resources are the second go-to5 . Make the most of this opportunity and speak with your existing customers who have Gen Z children about how you can support them and their children in access to protection advice .

Paula Pearson , Strategic Account Manager at Aviva , says :

THE NEXT GENERATION OF CUSTOMERS ARE OPEN TO PROTECTION COVER , IT IS UP TO US AS AN INDUSTRY TO REACH OUT TO THEM , EDUCATE THEM AND MAKE SURE WE ’ RE THERE TO HELP THEM SECURE THEIR INCOMES AND CREATE FINANCIAL RESILIENCE . FINDING NEW WAYS TO REACH RENTERS AND BUILDING LONG-TERM RELATIONSHIPS WITH THEM WILL HELP SECURE YOUR CUSTOMER PIPELINE FOR IF AND WHEN YOUR RENTER CUSTOMERS ARE READY FOR A MORTGAGE .

For support helping renters get the protection they need , visit our tenant protection hub .

[ 1-3 ] https :// www . gov . uk / government / collections / english-housing-survey-2022-to- 2023-headline-report . Contains public sector information licensed under the Open Government Licence v3.0 .

[ 4 & 5 ] Gen Z _ Insight . The research was conducted by Brand Potential on behalf on Aviva between 01.10.2023-31.01.2024 . 16 Qual Interviews : Pre Interview , a mock experience with proposition including Advised / Non-Advised with IFAs , and Direct channels & post interview . Online survey for N = 1,200 consumers , with a focus on ages 24-27 , plus consumers aged 18-23 and 28-40 for context . All respondents including those screened out ; age weighted to national proportions .

For adviser use only . Not for use with customers . Provided by Aviva Life & Pensions UK Limited . PT151413 07 / 2024

32 | PROTECTION ADVISER | AUTUMN 2024 |