It’s here and changing the
financing game for independent agencies
Offering premium finance at checkout can reduce
the typical premium collection time from 20 days to less than five … .
By Chase Petrey
Obtaining financing for insurance premiums can be cumbersome and time-consuming for everyone involved, requiring extensive back-and-forth exchanges between agents, financing providers, and insured customers. This process often leads to duplicate accounting work, longer collection periods, and fewer insureds having access to financing—until now.
Embedded premium finance is here and it’s changing the financing game for independent agencies. But as is often the case with new technology, you may be asking, “Is this really as good as it sounds?” Let’s look at a few of the reasons why you should consider adopting premium financing.
Stand out from the crowd
We know that small businesses can benefit from premium financing but often have trouble adopting it. The multiple handoffs, clunky manual processes and E&O risk have led to a flat rate of adoption among independent agents for years.
Embedding premium financing into your payment platform solves these issues and gives you a new value proposition. Having access to unique payment options is a strong selling point for prospects choosing a new agency and offering premium financing could be the reason your agency is chosen over your competitors. Small business owners need premium financing—and you can be the agency to make it happen.
Boost profitability
Becoming the go-to agency for small businesses opens a new market for your agency which will no doubt drive growth and revenue. And because take rates are improving, your agents have the potential to collect higher commissions. Need I say more?
Looking at the bigger picture, your agency will also be positioned to make more money. Financed payments make up 10% to 15% of agency bill policies. This ratio can reach upwards of 30% by automating more of the financing process for the insured and the agency, giving more insureds access to financing.
Because people are more likely to purchase higher-value policies or add-ons when the financial burden is spread over time, you’ll be opening the door to a new level of recurring revenue.
Optimize
checkout and back-office ops
Getting a financing agreement to the table without embedded premium financing as part of the equation requires a lot of back and forth between stakeholders, duplicative data entry, and undue time wasted. This is inconvenient for everyone involved.
Automating the process makes it speedier and more manageable for your insureds and staff. For example, it empowers your customers with more control at checkout, allowing them to pay their premium in full or opt for financing within the same payment page. The insured can also sign a financing agreement, make a down payment, and set up monthly payments—all without ever leaving that same payment experience.
When a financing agreement is signed, the financing activity is automatically created in your agency management system, seamlessly transferring the financed amount from the insured’s account to the premium finance provider. Reconciliation of down payments and financed amounts across multiple policies is quicker and more efficient, further minimizing administrative burden.
Still skeptical? Offering premium finance at checkout can reduce the typical premium collection time from 20 days to less than five, allowing you to speed up collection efforts.
Embedded premium finance
is for you
At a time when market conditions are challenging, it’s important for agencies to stand out. Elevating your customers’ experience by offering easy-to-obtain and flexible financing will help you win and retain more business. Premium finance is more than just another way for your clients to pay their premiums. It can be a great tool for your agency to differentiate itself in the market and boost revenue.
The author
Chase Petrey currently serves as president of Applied Pay for Applied Systems and is responsible for strategy, engineering, product, and go-to-market for the business. Chase has a diverse career in the enterprise software industry, bringing with him a unique set of fintech, Software as a Service (SaaS), and analytics skills. Chase also serves as president of the Salt Lake City Chapter at Silicon Slopes, a nonprofit organization that empowers Utah’s tech community to learn, connect, and serve in order to make entrepreneurship open and accessible to all.
