Brokers expect significant rise in the use of credit to buy insurance
- Half of insurance brokers interviewed said that last year more than 30% of the general insurance policies they sold were bought with credit, and this rises to 69% for commercial insurance sales
- Nearly one in four (23%) insurance brokers interviewed expect to see a double digit percentage increase in the number of premium finance policies they sell this year when compared to 2018
New research(1) reveals the insurance intermediary market expects clients to make greater use of credit this year when it comes to buying their cover.
The findings are from Premium Credit, the UK’s leading premium finance company, and show that 50% of insurance brokers anticipate the amount of credit used to buy general insurance in 2019 will be higher than the amount used last year, and only 3% anticipate it will be less. The corresponding figures for commercial insurance are 65% and 3% respectively.
In terms of the credit facilities used, 66% of insurance brokers anticipate clients will make greater use of premium finance this year when compared to 2018. The corresponding figure for credit cards is 42%.
When asked why they believe clients will use premium finance more this year, 58% said it was because disposable incomes for clients are falling so they are more reliant on credit. This was followed by 32% who said the cost for insurance products is increasing. Nearly a third (29%) said it was because premium finance is becoming better understood by clients.
Nearly one in four (23%) insurance brokers interviewed expect to see a double digit percentage increase in the number of premium finance policies they sell this year when compared to 2018.
More than half (55%) of insurance brokers interviewed for Premium Credit said that, in 2018, more than 30% of the general insurance policies they sold were bought using a form of credit, and this rises to 74% for commercial insurance sales.
Adam Morghem, Strategy and Marketing Director at Premium Credit said: “These findings suggest that people and businesses are making greater use of credit vehicles to buy their insurance cover- though we know that many are not using premium finance."
“The premium finance option is extremely valuable to many customers especially in the current economic climate, making it critical that premium finance is offered each time to every customer. We enable over two million customers to manage their payments and have the service and technology in place deliver a good customer experience.”
Premium Credit is a market leader in the UK and Ireland and is the BIBA accredited premium finance provider for its members. Premium Credit offer training for producers to support customer-facing staff offer premium finance; which is CPD accredited.
(1)The research company PollRight conducted research with 36 UK insurance brokers in January 2019.
Findings suggest that people and businesses are making greater use of credit vehicles to buy their insurance cover - though we know that many are not using premium finance.