As the market hardens and competition increases, insurance agencies are on the hunt for opportunities to differentiate themselves to retain renewals, while growing their new business base. Insureds are also putting a greater demand on agencies to deliver a variety of programs and policies and seeking assistance with cash flow and payment options. Premium financing is one of the most flexible and dependable payment approaches available.
For decades, premium finance companies have worked with agencies and insureds to provide financing for all forms of commercial insurance policies. Premium finance companies lend at rates typically less than those of standard commercial banks, and this lower rate allows insureds to leverage their cash for other critical business needs. Insureds pay for the insurance as they use it because payments are tailored and extended over an agreed-upon period of time. With premium payments spread over regular intervals, insureds can include this payment as part of their budget to smooth cash flow. Another great feature is that premium finance loans provide an off-balance sheet type of financing for insureds.
Commissions – No Delay
For agencies, premium financing represents an opportunity to deliver to their insureds a higher level of client service while still maintaining their own revenue flow.
All of the benefits, none of the fuss:
- Cost-effective credit option with no origination costs and fixed rates for the life of the loan
- No pre-payment penalty for early payoff
- Varied payment plans from three monthly installments to 12 equal payments including down payment
- Payment date may be adjusted to suit the insured’s specific cash flow needs
While premium finance allows the insured to spread their payments over multiple months, the agency still collects its full commission from the wholesaler at the time of funding of the loan.
With premium financing, insurance agencies are also free of the burden of tracking and managing premium payments. With the billing and collection process in the hands of the finance company, agencies can focus on providing to their insureds the best in insurance coverage and costs. Additionally, premium financed policies typically have higher renewal rates, which is yet another benefit to insurance agencies.
Premium financing expands the options insurance agencies offer to their clients, allowing them to act as a true full-service agency: from risk assessment to loss analysis to premium funding.
“At Stetson Insurance Funding, our solution drives efficiencies into our clients’ internal processes, allowing agencies to focus attention on more important topics, such as growing the business.”
Phillip A. Rapini
President, Stetson Insurance Funding, LLC
Beating the Bank
With recent economic events creating a credit crunch, banks and other financial institutions are tightening their lending policies making even basic loans more difficult to obtain for most business owners. The current social challenges have had a detrimental effect on many industries, and has put an increasing burden on businesses to better manage cash flow and expenses.
Premium financing provides competitive rates on all types of commercial insurance policies for businesses of all sizes and in all industries. Spreading payments over a defined period of time allows for better control of cash flow and releases capital for other business-critical needs. Insurance agencies benefit by delivering a reasonable payment option to their insureds while still realizing full commission. Agents are seen in the eyes of their insureds as a partner helping them better manage their business, gaining a client for life.
Premium Finance in The Connector
The Connector is excited to partner with Stetson Insurance Funding to automatically provide a premium finance agreement with every policy bound in The Connector. So now, even small commercial E&S risks that are shopped and bound digitally can be financed by the industry’s leading premium finance company.
For more information on The Connector or Stetson Insurance Funding, please contact us at email@example.com, 833-774-2628 or chat with us live M-F 8am-6pm CST.