The Prime Rate and Insurance Premium Financing

What is the Prime Rate? How does it relate to insurance premium financing? What else influences premium finance rates? These common questions and more addressed here!

The Prime Rate is the most common and widely recognized index in the financial markets. It is used as a starting point for all types of loan interest rates including mortgages, auto loans and business loans. It is defined by Investopedia as: “The prime rate (prime) is the interest rate that commercial banks charge their most creditworthy customers, generally large corporations. The prime interest rate, or prime lending rate, is largely determined by the federal funds rate, which is the overnight rate that banks use to lend to one another.”  As the Prime Rate changes, generally so too will borrowing rates on most loans.

While the Prime Rate is important, it is not the only factor that matters in insurance premium financing rates. Since premium financing is generally a short-term loan (less than a year), other short-term indexes are also important, such as the federal funds rate, short-term treasury bills and LIBOR. In addition to interest rate indexes, other factors may affect the premium finance interest rate such as how much money is being borrowed, the payment terms of the premium finance loan and the creditworthiness of the borrower, among other factors.

While determining premium finance rates can be complex, you can rest assured that Premium Finance Brokerage will work for YOU to ensure your customers receive the best possible rates for their premium finance loans. Contact us at 866-381-6501 or info@premiumfinancebrokeage.com for assistance with any of your premium finance needs.

It’s all about the SERVICE

Providing good service isn’t an option these days, it’s a requirement. Although many companies say they provide good service, what does that actually mean and how does it benefit the customer? With Premium Finance Brokerage we can answer those questions.

Premium Finance Brokerage is committed to the strictest ethical and service standards while offering the most competitive markets in the premium finance industry. It is our sole objective to provide our customers the best possible experience with the highest degree of integrity. We provide many services with specific benefits including:

  • Concierge Service Plus suite of services to minimize cancellations, assist with the quoting process and maximize your premium finance assets
  • One source and one point of contact for all your premium finance needs simplifies the process for your agency
  • Access to several National and Regional providers to ensure you are getting the best offerings for your insureds
  • We work for YOU and represent the finance providers so you have a team of industry veteran experts working for you throughout the entire premium finance process
  • If our customer service does not meet your standards, we will refund 100% of our gross profit on that particular transaction. 

If you haven’t worked with us recently or ever, we would love the opportunity to earn your business. Please contact us at info@premiumfinancebrokerage.com or 866-381-6501 to see how we can help you streamline your premium finance process and maximize your agency’s potential. We work for YOU!

Bankruptcy Premium Financing

Can insureds in bankruptcy obtain premium financing? Are there special forms required for premium finance loans for insureds in bankruptcy? What are the agent’s responsibilities? These are all important questions that will be addressed.

The most important question on this topic is can an insured in bankruptcy finance their insurance premiums? The answer in most cases is YES. It is critically important to ask the insured if they are in bankruptcy or currently involved in a bankruptcy proceeding. In most premium finance agreements, the Agent or Broker representations specifically asks if there are any known bankruptcy or insolvency proceedings so it is part of the legal loan document. If the question is not asked, it could lead to a potential E&O exposure.

If the answer to that question is yes, that information needs to be relayed to the premium finance provider so the account can be properly underwritten. After underwriting and upon providing the premium finance agreement, the premium finance provider may include additional documents that need to be signed in order for the premium finance loan to be accepted and funded. This may require more time between underwriting and funding so please keep that in mind when these situations arise. Each case can be unique so be sure to have an open dialogue with the premium finance provider every step of the way in the underwriting process.

If you have any questions about a bankruptcy situation or would like to discuss an account that is in or is contemplating bankruptcy, please contact your Sales Executive directly or Premium Finance Brokerage at 866-381-6501 or at info@premiumfinancebrokerage.com.

Zero Down Payment on Additional Premiums

If you write trucking accounts, specialize in transportation or have any commercial business with endorsements you know how challenging those accounts can be. Premium Finance Brokerage (PFB) has solutions for you! One of them is the ability to finance additional premiums with no additional down payment.

By not having to collect an additional down payment (limitations apply) you can simply add the entire additional premium to the existing financed account. This will make the process of paying for the additional premium easier and eliminate the need to wait for the insured to cut a check or deal with ACH or credit card payments to come in. This will require less time and effort by the agency thereby making the process more efficient and reducing expense related to servicing the account.

With zero down payments, our proprietary Concierge Service Plus program and our associates working for YOU, managing your premium financed accounts has never been easier. For more information, please contact your PFB Sales Executive directly or inquire with us at info@premiumfinancebrokerage.com or by phone at 866-381-6501.

Beating the Competition with PFB

Beating the competition is what business it is all about. Keeping your existing accounts and winning new ones is the only way your agency will survive over the long run and Premium Finance Brokerage (PFB) is dedicated to helping you, the insurance agency, do exactly that.

There are many ways that PFB can help you beat the competition. Here we outline several key ways we can do that.

  • Complete a Premium Finance Physical with PFB if you haven’t done so recently or ever. The PFB Physical link here is a comparative analysis tool that we created to provide a clear picture of your current premium finance program and offers recommendations for improvement. Having the most competitive and appropriate program for your book of business is critical in ensuring success for your agency. With our portfolio of premium finance companies, we can work with you to find the best program for your premium finance needs.

  • Ask us about our Concierge Serve Plus (CSP) program. This cutting-edge program was designed to help you manage your premium finance assets, maximize your profitability and minimize or eliminate much of the work required by the agency to do so. Ask us about how our CSP program can help your agency today!

  • Offer premium financing to every client and prospect, even if they have not financed before. This is critical in retaining clients because you never know when the client might have a more pressing need to use their capital. It also shows new and existing clients that you are working for them by providing them with options to help them pay for what can be one of the largest expenses a business has, their insurance. And remember, if you don’t offer premium financing, your competition very likely will.

If you are not currently working with PFB, we would love the opportunity to earn your business. Anyone interested in learning more about how PFB can help you beat the competition, please call us at 866-381-6501 or email us at info@premiumfinancebrokerage.com.

Yacht, Boat or Watercraft Insurance Premium Financing

Yes, we do have a market that will finance your watercraft insurance premiums! These types of accounts have some special needs and unique nuances so it is important to work with insurance markets and premium finance sources that have the experience and capacity to handle your accounts professionally and expertly. Whether your insured has a sailboat, yacht, personal watercraft or dinghy, we have an experienced market that will offer very competitive rates and terms to provide premium financing to your insured which is extremely important during this time of a hardening market for these types of coverages.

For more information, please contact your Premium Finance Brokerage Sales Executive directly or contact us at 866-381-6501 or via email at info@premiumfinancebrokerage.com.

Fending Off the Competition

In these ultra-competitive times with agents, brokers, direct writers and on-line platforms all competing for your accounts, it is imperative that you do everything you can to protect your existing business. Don’t become complacent. In addition to what you would normally do, be sure you are doing the following:

  • Make sure your client has the appropriate amount of coverage to meet their current needs.

  • Regularly check to ensure the premium being charged is competitive.

  • Provide value-add to your client by being a trusted resource to them for more than just basic insurance. Bring more to the relationship.

  • Be sure to offer premium payment options such as premium financing even if your client has never financed before.

Doing all of these things won’t guarantee that you keep all of your clients but it will make it much more likely that you do. You may just win more new business as well. Remember, if you don’t go above and beyond for your clients and prospects, someone else will!

For more information on how Premium Finance Brokerage can help you enhance your book of business, finance hard to place accounts and help you be a valued resource to your insureds via our network of premium finance companies, please contact us at 866-381-6501 or at info@premiumfinancebrokerage.com.

CANCELATION AVOIDANCE

Writing an insurance account can be very difficult, so it’s important to keep that account from canceling unnecessarily. Premium Finance Brokerage, LLC (PFB) can help you manage your accounts and assist in cancelation avoidance.

Being premium finance experts, PFB can provide tools and resources to help you maximize the profitability of your financed insurance loans. Some of the tools and resources are as follows:

  • Setting the appropriate payment due dates when quoting. This is an often-overlooked aspect in avoiding cancelations. Your insured may receive revenue at certain times of the month or year. You may want to schedule payments so that insured revenue collection coincides with premium finance loan payment due dates. Please think about this factor and consult with your PFB representative so that the proper payment due dates and payment schedule can be created at the time the premium finance agreement is provided to the insured for signature.
  • Receiving pre-cancelation reports. PFB can send you your list of accounts that are getting close to canceling. This would give you a heads-up on them and allow you to contact the insured for payment or take other action should you choose to do so.
  • Cancelation hold requests. Your PFB representative will work with you to see if there are accounts on your pre-cancelation report that are in need of a hold in order for a payment to be made and the cancelation avoided. If approved by the premium finance company, the hold would provide a few extra days for that payment to be made.

The bottom line is, when a financed account cancels, we all lose money! If you would like to learn more about how PFB can help you manage your premium finance portfolio and maximize your revenue, please contact your PFB representative or contact PFB at info@premiumfinancebrokerage.com or 866-381-6501.

CAREER OPPORTUNITIES AVAILABLE

Sales Executive & Business Owner

We are looking for motivated self-starters who want to control their careers and their futures.  This opportunity comes with unlimited income potential and the chance to own your book of business in the insurance premium finance industry. While premium finance or insurance experience is a plus it is not necessary to join our team. We can teach anyone who really wants a career owning a business. Veterans and others who want to work very hard are most welcome to apply.

You will work with insurance agents, brokers and wholesalers to help them place their premium finance business with our diverse network of commercial and personal lines premium finance providers.  Most importantly, you will provide customers with the best possible experience with the highest degree of integrity.

 

What we offer to help you attain success:

  • Personalized training from our leadership group
  • Short term draw
  • Social media coordinator/personalized messaging
  • No territory restrictions
  • Prospecting and lead generation assistance
  • Laptop computer, if needed, with technical support
  • Business ownership planning

 

What you can do to attain success:

  • Give 125% of your time and energy. Apply yourself and learn this business quickly and then SELL, SELL, SELL.

 

If this sounds interesting to you (or you have an existing book of business) and you have excellent interpersonal and negotiating skills along with a passion for service and a commitment to integrity, we would love to talk with you about the opportunities we offer.  Please call Premium Finance Brokerage at (717) 767-7088 or email a cover letter and resume to: careers@premiumfinancebrokerage.com to explore our career opportunities.

Preview – Concierge Service Plus

Premium Finance Brokerage is excited to pre-announce the launch of a new, enhanced level of service to our premier clients.  We are calling it Concierge Service Plus (CSP).

From the firm that recently rolled out the PFB Power Play (Link Here) and pioneered the Premium Finance Physical (Link Here), we have a history of going the extra mile for you, our valued client.  Our company policy states “It’s our objective to provide clients the best possible experience with the highest degree of integrity.   We guarantee that you will have pleasurable experience with us.”  This new Concierge Service Plus (CSP) is the next chapter and new level of service that sets us apart from any other premium finance provider in the nation.

You will be hearing more about Concierge Service Plus (CSP) in the near future but should you have any questions, please feel free to talk with your Sales Associate about it and what it means to you.  If you aren’t currently our client but are interested in learning more about this cutting-edge program, we would love to hear from you!  We can be reached at 866-381-6501 or info@premiumfinancebrokerage.com.

Underwriting Large Accounts – The PFB Power Play

When it comes to premium financing, working large accounts can be very different from working smaller accounts.  Here we share some tips on how you can effectively handle large accounts and introduce you to the PFB Power Play.

The PFB Power Play is a team of industry experts that help secure the best possible outcome for your client.  We will do a thorough evaluation of the credit risk, insurance policies and any other mitigating factors that determine the amount of exposure a finance company may be willing to assume.

The first tip is not unique to large accounts (those accounts generally over $100,000) but it becomes even more important when working on them and that is to ensure you have all of the policy information accurate and complete.  Having accurate effective and expiration dates, a breakdown of premiums, taxes, fees and minimum earned premium percentages or amounts will be essential in obtaining an accurate premium finance agreement.  Other policy specific details like if there are any seasonal or hurricane earning provisions, if an auto related policy has filings or if a work comp policy is guaranteed cost coverage or not should be disclosed when requesting the premium finance quote.

The next tip is to inquire with your insured if financial statements are available in case the finance company requests them as part of their underwriting process.  This can help manage the client’s expectations that they may be needed as part of the underwriting process.  If complete audited financial statements are not available, unaudited statements, internally compiled income statements and balance sheets and even more basic profit and loss statements may be helpful for the loan underwriter.

The final tip is to be sure to understand what loan terms may be best for your client.  Some clients may need a low down-payment while others may benefit more from an additional installment or a customized payment schedule to meet certain operational or cash flow needs.  Talk with your clients about this.  Understanding your client and discussing their needs with your premium finance partner during the submission process can make the difference in getting the best premium finance quote for your client or not and possibly writing the client or not.

In summary, be sure you have all the account information and detail available when beginning the process of obtaining a premium finance quote for your large accounts.  The process and end result will be smoother and more productive for you.  We at Premium Finance Brokerage have large account expertise for accounts in all industries and we are ready, willing and able to help you when your next large account arises. Please feel free to contact us for assistance at 866-381-6501 or info@premiumfinancebrokerage.com.

How can Premium Finance Brokerage help a new agency?

New insurance agencies face many challenges including paying for startup costs, finding the right staff and obtaining access to markets to ensure they are competitive, to name just a few. These are no easy tasks. We want you to know that Premium Finance Brokerage (PFB) is here to help in a few ways!

PFB is the largest privately held broker of premium finance in the nation. We have relationships with several national and regional premium finance companies so we can find the best fit for your new agency’s needs. We will work with a new agency (existing ones as well!) and complete a Premium Finance Physical. Premium Finance Physical | Insurance Premium Financing (premiumfinancebrokerage.com) The Physical is a comparative analysis tool that was created to provide a clear picture of your premium finance needs and offer recommendations for your program. We will assist you every step of the way in starting and developing your premium finance program.

Another way PFB can give assistance to your agency is by consulting with you on your accounts to help you obtain the best possible rates and terms for your insured’s premium finance loans. Our premium finance experts have many years of experience and can help you work through any challenging aspects of the account to ensure the financing helps facilitate the sale of the insurance program you have developed and help you retain existing clients and land new clients as well.

Whether you are a newer agency or an established one, we would like the opportunity to assist you with your premium finance program. Please contact us at 866-381-6501 or info@premiumfinancebrokerage.com.

Hurricanes and Commercial Insurance Premium Financing

With hurricane season right around the corner, now is a good time to think about possible hurricane provisions on your insureds’ commercial property risks.

You may or may not know that many insurance companies include hurricane or seasonal earning provisions or endorsements in some of their commercial property policies. The endorsement will change the standard premium earning of the policy. It is important to note that they may not be limited to traditional hurricane areas such as Florida, Texas or the Southeast coastline. It is critical to review the policy language carefully, even when quoting a renewal as policies can change from year to year.

The Hurricane minimum earned premium endorsement generally runs from June 1st to November 1st. If you cancel a policy that has this endorsement, remove a location or reduce the amount of Insurance on a location, and coverage existed any time during the period of June 1st to November 1st, the amount of unearned premium returned will be significantly reduced based on an earnings chart provided in the policy/endorsement. Typically, the minimum earned premium amount with this endorsement is 75% or 80%.

A very important point to remember is that just because a policy might have this very high minimum earned premium doesn’t mean that the policy can’t be financed. It very well may be depending on the amount of the premium, any other policies being financed, the financial strength of the insured and several other factors.

The bottom line is to be aware of the potential for the hurricane or seasonal earning premium endorsement in your insureds’ policies and don’t rule out premium financing as a payment option for your insured. If you would like any assistance with your situation, please contact us at 866-381-6501 or info@premiumfinancebrokerage.com.

What makes Premium Finance Brokerage Unique

Is your premium finance provider able to shop several finance companies to ensure you are getting the most competitive offering? Premium Finance Brokerage can do just that!

Premium Finance Brokerage is built upon the premise of trust and choice. We are the largest privately held aggregator of premium finance in the nation. We work for our clients who are insurance agents, brokers and general agents across the country. We help them to secure the best premium financing fit for their insureds through our diverse network of premium finance providers, while offering one point of contact. We strive to deliver to our clients the best possible experience with the highest degree of integrity. We guarantee that you will have pleasurable experience with us.

Please contact us via phone at 866-381-6501 or email at info@premiumfinancebrokerage.com to discuss how we may be able to help meet the needs of your agency as well as your insured clients.

Financing Assigned Risk Commercial Auto

Fleet of White Commercial Vans

We often get asked why the down payment is higher on financing assigned risk commercial auto policies.  The issue with an assigned risk policy is that it’s subject to audit.  Unfortunately, many of these audits are done during the policy term resulting in a premium increase.  These midterm increases drive the customer to shop their insurance.  If they decide to make a change during the term the assigned insurance company will use the audit adjusted premium to calculate the earned premium. When this happens the unearned premium returned to the finance company comes back significantly short of the loan balance. This is why you often see down payments of 35% or more on assigned risk auto policies. Another way the finance company mitigates the risk is to shorten the number of installments from 9 to 7 or 8.

If you need help financing an assigned risk commercial auto policy feel free to reach out.  We’ll do whatever we can to help the client with the most flexible payment plan possible.

Covid-19 Relief Loan

If your business needs help paying for the cost of insurance due to Covid-19, we may have some loan options available to assist you.  We can potentially offer a solution that enables you to borrow your insurance premium with no out of pocket cost.  We also have the ability to offer working capital and bridge loans for cash flow.  If you need help during these challenging times please reach out to us directly or have your insurance agent contact us for additional information.

We will do whatever we can to help your business.

Your Premium Finance Partner

The last few months have been a real challenge for our society and a firm test of the human spirit.  I truly hope that you and your family are safe and healthy.  Our hearts go out to those who’ve lost a loved one or are still dealing with the impact of this pandemic.  There are still many people who are hurting.  I want to take this opportunity to thank all our partners who are helping us get through this difficult time.  I believe that it will be increasingly more challenging in the days ahead. I want everyone to know that we will do whatever we can to help our customers.  We’ve made a pledge to keep our doors open and continue to accept business with the most flexible payment terms possible.  We are here to help you whether or not you’re a current customer.  Feel free to contact us if you need help or advise on your situation.  It is our obligation and desire to help others any way we can.

FLEXPAY

FLEXPAY is an exciting new workers’ compensation product. It combines the benefits of a premium finance agreement with the cash flow advantage of a Pay As You Go program. FLEXPAY is an ideal tool for insurance agents, wholesalers, or insurance carriers who are looking to offer their workers’ compensation clients a new and unique product.

How does FLEXPAY work?

  • Payments are based on actual payroll
  • Works with any payroll company
  • Seamless integration with clients payroll system
  • Self-Reporting option if there’s no payroll company
  • Weekly, Bi-Weekly or Semi-Monthly payroll periods

Advantages:

  • Down-Payment only 10%
  • Commissions Paid Upfront
  • Enhance Cash Flow for your insured
  • Create new business opportunities
  • WC Assigned Risk, Truckers, Restaurants, Non-profits, or any insured looking to reduce their DP    or improve their cash flow.

Brien Volpe, CPCU
Sales Executive
bvolpe@premiumfinancebrokerage.com

Down Payment Financing

For the past 5 years we’ve been offering a program that allows an insured to finance their down payment premium. This cutting edge approach has enabled PFB to be the industry leader in this market space. Last year alone we financed over 1 million dollars of down payment or fully earned premium. If you have a client that’s in need of additional cash flow and would like to finance 100% of their insurance premium, we have a platform to make it happen.

Ted Elliott
Sale Executive
telliott@premiumfinancebrokerage.com

Success Story – Homeowners Insurance

One of the best reasons to work with Premium Finance Brokerage is our belief in representing multiple premium finance companies. We do not work for a premium finance company; we work for you to bring you the best in insurance premium financing. Last week I received a call from an agency I recently started representing with an unusual request. This agency wanted to premium finance a personal lines policy. The company currently working with my agency is not filed to premium finance personal lines. (Most finance companies do not premium finance personal lines) This personal lines homeowners’ policy was located in the Bahamas with an annual premium of just over $75,000. Luckily, Premium Finance Brokerage represents two finance companies that would premium finance this policy. I was able to get a premium finance contract and satisfy the needs of the agency. Happy agency owner and happy insured.

Ted Mast, AAI
Sales Executive
tmast@premiumfinancebrokerage.com

Construction Wrap Policy

Premium financing is a fairly standard product given the annual policy terms of the majority of liability, property, and automobile coverages. Construction wraps are being utilized more these days given the recovery from the recent recession. These products are usually written on a variation of annual terms and the amount of installments is important to allow for payments to be spread over the contract period. Having multiple premium financing sources allows PFB to find the best payment options for your insured

Jim Wright, CPCU
Sales Executive
jwright@premiumfinancebrokerage.com

Premium Financing 101

Premium Finance is the business of providing loans to consumers. Premium Finance, unlike a bank, provides an insured party the ability to cover the cost of general insurance premiums. Insurance premiums for both commercial and personal policies can be financed. The premium financing loan helps the insured alleviate the need for large up front capital costs normally associated with insurance premiums. The premium finance company provides payment in full to the insurance company who issued the policy. The insured pays the premium finance company on a monthly, quarterly, or semi-annual basis – these payments include any fees and/or finance charges associated with the loan. The premium finance company is given “power-of-attorney”. The power-of-attorney affords the finance company the right to cancel the insurance contract in the event of non-payment by the insured. The unearned portion of the insurance premium is also assigned to the finance company in the event of a return premium. This provides the finance company security (collateral) in the loan and helps to ensure repayment in the event of a default. Using the insurance policy as collateral is very similar to a consumer using his or her new vehicle as the collateral for the loan.

Brien Volpe, CPCU
Sales Executive
bvolpe@premiumfinancebrokerage.com