The protection outlook for 2023

As we move into 2023, the cost-of-living challenge remains central to our thinking. Recessionary fears continue to make headlines. Prices are still high, and although CPI fell back a little in the December 2022 inflation report to 10.5%, higher bills across the board are still impacting people’s lives and their pockets. This, combined with mortgage interest rates that have risen from last year, certainly impacts the outlook for protection.

But it’s not right to assume that the economic context necessarily results in a negative outlook for our industry. In fact, the picture is very mixed. Yes, there are undoubtedly cost-of-living pressures, putting a strain on household budgets and people’s financial plans. However, events of recent months and years have also made many clients feel much less financially resilient – and it’s this feeling that makes them much more open to the protection conversation.

Advisers know their clients, so they’re best placed to help each and every one of them think about their own situation – their financial plans, budgets, and financial resilience – and to explain the value that protection provides.

The crux of the matter is, how much influence will each of these two competing factors have on protection conversations this year? We did some research into this in the second half of last year. Just over 700 advisers, active in the protection market, responded to our survey to share their own experiences of how they, and their clients, were coping with the challenge of rising prices. And how easy or difficult they were finding getting and keeping clients protected. The findings were incredibly mixed.

Many advisers told us that the post-pandemic increase in client openness to protection conversations had persisted throughout 2022, making it easier for them to talk about it. Others suggested that cost concerns were trumping all others. In fact, the views were so varied, we wanted to test them out further. To do this, we spoke to more than a dozen influential figures in protection distribution, spanning financial advisers, wealth advisers, protection advisers and mortgage brokers. Our aim was to dig deeper into their views on the current financial challenges faced by their clients, and to share their experiences of how they help their clients get, and maintain, the protection they need.

We’ve packaged their insights, together with our own views, into a white paper: On The Front Foot. The paper contains what we believe are the 10 most actionable takeaways based on the discussions we’ve been having across our business and with our advice partners. The takeaways aren’t new, but they’re a good reminder of what most advisers are already doing – or need to do more often. This includes how to best approach the protection conversation, being mindful that clients’ budgets are under pressure, and how to demonstrate the value of protection as the higher cost of living continues to eat into savings and reduce their clients’ financial resilience.

Advisers know their clients, so they’re best placed to help each and every one of them think about their own situation – their financial plans, budgets, and financial resilience – and to explain the value that protection provides. As well as its role in underpinning other financial objectives. We can see from our research that a large number of advisers share this view, and those we spoke to are certainly determined to rise to the challenge to get people the protection they need and keep them protected.

We produced this white paper to be a useful resource to every adviser seeking to protect their clients this year. We want to thank those who took part in our research, providing responses to our survey, and to our intermediary contributors who shared their views. The white paper can be found on our adviser website: https://adviser.guardian1821.co.uk/on-the-front-foot/. Working together, I’m confident we can make 2023 a positive year for protection.