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Interview: Paul Trail

Paul Trail

Insurance Age meets the Close Brothers Premium Finance MD.

For Paul Trail, the new MD at Close Brothers Premium Finance (CBPF) it’s an exciting time to be part of UK broking, despite the huge challenges of Covid and the ongoing economic fallout.

Trail has ten years under his belt at CBPF and cut his broking teeth as sales and marketing director before stepping up to be MD in August this year.

Although not a broker by background (he was in finance at HSBC and Citi Bank earlier in his career) he sees his role leading the premium finance division as helping brokers thrive and prosper.

In regular meetings with broking partners (CBPF has 1,600 partners serving over three million customers in the UK and Ireland) Trail pointed out the hardening market in commercial is near the top of their agenda.

Trail said: “It’s difficult for brokers to operate in a hard market, with everything else going on too. Rate increases are sector specific, but many businesses are struggling, with challenges from both trading and from an economic point of view. For those business owners to then hear from their broker that premiums are going up by 10-30% is a tough conversation.”

He added: “When it comes to their car or home, business owners have a perception that premiums should be falling, but if they read across to commercial and see renewals going up by 20%, that feels counterintuitive and may encourage them to rebroke the quote. Brokers have to take great care about how they present the issues.”

Trail suggested that offering finance and payment choice can be a big help in finding a solution to increased premiums.  “As a result of Covid, there are businesses in a distressed state and others doing well, but most (if not all) need and want to be prudent in their financial planning, to preserve cash and/or improve cashflow.”

“Premium finance improves cash flow and helps clients afford the right level of cover; they can reduce the limits to bring the price down or spread the cost to keep the level of cover and have the right protection.

To those 11% of commercial brokers who don’t offer premium financing at all, Trail urges them to make contact with CBPF and set up an agency as demand for paying by instalments is rocketing. In this current environment offering your clients multiple ways to pay and then allow them to choose, is the correct and compliant thing to do.

Turning to personal lines, Trail cited recent research from Consumer Intelligence which found that premium finance accounts for 16% of motor broking income, and 32% of motor customers pay for their policy in instalments, underlining the importance the product plays in broking and how crucial it is for customer service.

Moreover, with 36% of people worried or very worried about their financial security, and financial vulnerability likely to increase as a result of the economic downturn, Paul thinks that customer demand will also accelerate in personal lines alongside commercial. 

Another topic that comes up regularly in broker meetings is capacity. Personal lines and commercial brokers are also keeping a close eye on capacity issues, according to the MD, following the demise of a number of under-capitalised insurers that had entered the UK market in search of a quick profit, and then gone bust.

“I understand brokers fear that being uncompetitive when they quote for business where price is key, risks their clients going elsewhere, but there is a heavy price to pay if the insurer folds, especially on non-refundable policies.”

“Common sense is always the best rule to apply when choosing an insurer,” he said, adding: “Recent failures among lightly capitalised insurers such as Qudos, Alpha and Gefion, are bad for business and bad for our industry’s reputation.”

CBPF’s insights into capacity stress just how much data and insight into broking Trail and his team can command, and how deeply ingrained the business (which was the first to offer premium finance to brokers, over 40 years ago) is in UK and Irish broking.

“Our relationships with many of our partners go back years. We have helped them through the last true hard market, after 9/11, and we will continue to be by their side well into the future. I believe our consistency and focus on long term relationships sets our business apart from our competitors.”

Trail said that despite the long list of difficulties facing the market, brokers are hugely resilient and generally up for the challenges that get thrown at them. “They have a flair for cutting through and managing their businesses successfully no matter what the economic weather is.”

He added: “I’m delighted to be in my new role at CBPF, and I’ll keep up our tradition of continuous contact with our broking partners, sharing our learnings, developing together and ensuring that premium finance can be a vital revenue earner for our partners.”

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