Premium Finance Company
- Thread starter Mjones77
- Start date
- 134
Premium finance is only needed for the Excess and Surplus policies. Almost all standard carriers offer payment plans
kristophmarsh
Expert
Coming from a commercial background, premium finance is a big deal. You see, when you start to get some bigger clients, they're not necessarily going have to have the funds upfront. Sure, some insurers may allow a pay-by-the-month option, but think about it, if you were an insurance company wouldn't you rather have the premium when you write the risk? Probably.
And considering that investment income makes up a big portion of their revenue, there's a lot of incentive to get paid asap. Plus, it wouldn't be very helpful if their client stopped paying them mid-term, for whatever reason. And not just for the client's sake, their coverage could be canceled from underneath them.
Enter the premium funder. They pay the premium on behalf of their client so the insurer can get on with their job of issuing coverage and paying claims. The funder then gets to work, handling the administration associated with collecting monthly installments and sorting out any dramas that may arise; all without affecting coverage unless there is a real issue.
As a broker, I think it's a good idea to have a couple of premium funders up your sleeve. In most cases, they will be pretty vanilla relationships - not a lot goes wrong. However, you'll want to know you're getting the best deal for your client, and it's never a good idea to have all your eggs in one basket.
And considering that investment income makes up a big portion of their revenue, there's a lot of incentive to get paid asap. Plus, it wouldn't be very helpful if their client stopped paying them mid-term, for whatever reason. And not just for the client's sake, their coverage could be canceled from underneath them.
Enter the premium funder. They pay the premium on behalf of their client so the insurer can get on with their job of issuing coverage and paying claims. The funder then gets to work, handling the administration associated with collecting monthly installments and sorting out any dramas that may arise; all without affecting coverage unless there is a real issue.
As a broker, I think it's a good idea to have a couple of premium funders up your sleeve. In most cases, they will be pretty vanilla relationships - not a lot goes wrong. However, you'll want to know you're getting the best deal for your client, and it's never a good idea to have all your eggs in one basket.
In my opinion, premium finance companies are not hard to come by. I work for a E&S MGA who also has an in-house premium finance company. Competition is tough for the finance to get accounts. There are many large premium finance companies that you can get your foot in the door with. Going to BIG I events or other conference's through the US is your best bet to establishing a relationship with a prem fnan company. Just don't hound them on agency fees and tons of conditions and they will keep you.
dallashorn
New Member
- 2
Derek Freeman
Stonemark, Inc.
8501 Wade Blvd, Suite 620
Frisco, Texas 75034
P: (214) 618-8722
F: (214) 618-8723
[email protected]
Stonemark, Inc.
8501 Wade Blvd, Suite 620
Frisco, Texas 75034
P: (214) 618-8722
F: (214) 618-8723
[email protected]
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