Premium Finance: what’s in it for brokers?

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How do brokers benefit from Fulcrum’s Premium Financing solution? And how do they know if Insurance Premium Financing is right for their clients?

Many South African businesses have been hit hard by the COVID-19 pandemic. Due to this, brokers are finding that, at a time where they would normally have a client renewing their insurance premium upfront, they are now faced with anxious clients reluctant to renew, due to the financial uncertainty of the future.

Because of this, there have been more requests from customers asking about instalment plans for their premium plans. And, in turn, brokers are becoming more proactive about offering instalment plans in the form of premium financing. Ultimately, Fulcrum’s premium financing is a financial inclusion model – it ensures that businesses have access to affordable and valuable financial products and services that are delivered in a sustainable way. This means more businesses are able to purchase insurance and form part of the financial ecosystem. At Fulcrum Premium Finance, the indispensable relationships we have established with our brokers are crucial to our ability to provide South Africa’s leading premium finance solution. We have recognised that, in order to provide a seamless financing solution that helps businesses free up cash flow for reinvestment in their operations, we must ensure that our clients – the insured – are partnered with the best brokers in the market. Our brokers offer a reliable source of informed advice backed by years of experience, which allows them to better cater to the specific needs and risks faced by our clients and their businesses. But how, exactly, do brokers benefit? And how do brokers decide whether or not insurance premium financing is right for their clients?

The 3 Key Benefits for brokers:

  1. Firstly, there’s the obvious financial benefit: brokers receive their full annual fees and commissions upfront, providing a welcome cash injection into their businesses.

  2. Secondly, there’s the benefit of increased client retention: annual policies ensure that clients are less likely to move to another brokerage during the term of the policy.

  3. Thirdly, your administration is reduced because Fulcrum administers the debit orders and credit control, which results in less admin for the broker.
How do brokers decide whether or not insurance premium financing is right for their clients?

Instead of asking: “Why should my client take out premium financing”, brokers should rather be asking: “Why shouldn’t they?”

Premium financing is an option that should be considered by all businesses, regardless of size or sector. The more sizable or complex the policy, the more benefit the client stands to gain. The best course of action for brokers would be to discuss their book with a premium financing service provider to help decide which clients would benefit the most from a premium financing service.

If any of your clients have sizeable or complex insurance policies, get in contact with us. We would love to have you on board.

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