The protection industry is not optimistic that the Mortgage Market Review will result in higher volume sales of protection products, according to the Protection Review.
The industry body asked both advisers and providers the question: What impact do you think the Mortgage Market Review will have on the volume of protection business written this year?
While half the respondents expected to see no change in sales, a further 31.82% expected to see a decrease of protection policy sales.
This left only 18.18% expecting the FCA requirement of an affordability assessment on approving a mortgage to positively affect sales.
Kevin Carr, chief executive of the Protection Review, was looking on the bright side. He said: "While many mortgage advisers and protection commentators have commented negatively on some aspects of MMR, it is perhaps reassuring that a fifth of the market expects protection sales to increase as a direct result.
"The fact that having protection insurance in place could reduce how much someone could borrow under the new rules is somewhat counter-productive though.
"A more sensible rule might be that if you can't afford adequate protection then you can't afford the loan. Likewise proving affordability out outset is one thing, but what about ten years down the line?"
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