The current state of the trucking and transportation insurance financing market is very challenging to say the least. In order to try and help our clients, we have put together some tips that may help you navigate when putting together deals or programs in this space.
According to various industry resources (CRC, Insurance Journal) inflation, driver shortages, high fuel costs, supply chain problems, among other issues, have come together to make the trucking industry a very difficult one to operate in today. This can all lead to difficulty in finding insurance and doing so at an affordable price while providing flexible payment options to the insured. As a result of these difficulties, many insurance agents and brokers are having to shop new and different insurance carriers, MGA’s, wholesalers and even Risk Retention Groups to find insurance options for their insureds. This can also affect premium financing options.
When working with new or different insurance markets, be sure to get familiar with all of the terms and conditions of the proposed policy including any minimum earned premium clauses. Minimum earned premiums are important factors to consider when presenting insurance options to your insureds and also when requesting a premium finance agreement. All premium finance companies will want to know if there is a minimum earned premium and if so, how much it is. The finance company will also want to know if any of the policies are subject to State or Federal filings, so please be sure you have that information as well. (Insurance filing requirements)
If you are seeking financing of a Risk Retention Group policy, be mindful that not all premium finance companies will finance all or any Risk Retention Group policies. More time and effort may be needed to secure a premium finance agreement for these policies so be sure to factor that in to your insurance presentation. Additionally, you may want to check your agency E&O policy to make sure that you are covered when writing with a Risk Retention Group.
If you are working on a large account or are in need of special terms for the financing, you will want to request financial statements from the insured to help complete the underwriting package and assist with the credit evaluation on the insured by the finance company. Also keep in mind that premium finance terms an insured may have received in prior years may not be a realistic expectation for the current year due to all of the previously mentioned challenges in the marketplace.
Now more than ever it is critically important for you to be working with experts in the premium finance industry and that is where Premium Finance Brokerage can be your ally. We work for YOU and not for the premium finance companies. We are seasoned premium finance experts with decades of experience in underwriting, credit, sales support and creative financing along with access to multiple premium finance companies that will allow us to assist you in obtaining the best payment options for your insureds.