Insurance Carriers
A successful insurance carrier premium finance program consists of a few core components.
- First your distribution partners have to embrace it as an viable option to your existing payment plans
- Second it has to be easy and have sufficient integration to deliver the service
- Third the program has to have great on-going account payment servicing and value to insured’s (link)
- Fourth the carrier must be able to maximize sales and operational performance
Program Options:
- Xpress Capital branded program with revenue share
- Carrier branded program with or without carrier premium finance captive
- Premium Finance joint venture blending servicing and capital needs
Organizational Impact:
Sales –
Distribution partners want more payment options to offer their clients.
- Depending on the product type, a lower down payment and extended payment term may be the difference between selling a policy or not.
- It is also known that a insured may consider a higher priced policy if that policy provides them with a lower acquisition cost and payment convenience.
- Distribution partners will place more business with a carrier who pays commissions when the premium is paid-in-full.
- For convenience policies can also be bundled on one payment plan to provide aggregate payments and better terms for insured’s which may be using multiple carriers.
Operations –
Carriers can benefit from offering premium financing as a payment alternative or option to existing payment plans. Operationally, premium financing can significantly reduce the cost associated with servicing a policy. In the process, the majority of the servicing is facilitated by Xpress Capital, including;
- Originating the agreement
- Booking the loan
- Funding the carrier the full premium
- Collecting ongoing installment payments
- Managing collections
- Managing the notices;
- Shortage
- Letter of Intent to Cancel
- Cancellation
- Reinstatement
- Commission Payments to the Agent
Carriers are left to process a single ACH payment from Xpress Capital and apply it to the account. The only additional administrative cost is incurred during the endorsement or cancellation process.
Finance –
Carriers can also benefit financially by bolstering profit and lost and balance sheets.
- Increased sales revenue – more options, commissions paid up-front equals more sales
- Increase profit margin per policy – same price with lower servicing costs
- Premium paid in full at policy origination can positively impact several areas of your balance sheet including;
- Cash flow
- Short term borrowing costs
- Investment income
- Lower collection costs and write-offs
- Re-Insurer costs
