Supporting clients with Payment Services

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Premium finance Week: How can brokers use technology (specifically Payment Services) to help and support their clients?

The impact of the Covid-19 lockdown has been stark for many businesses. As such cashflow has become vital for many in terms of staying afloat, especially with so much uncertainty around the economy and how long the impact of the Coronavirus will be felt.

With this in mind insurance brokers have a key role to play in helping clients spread the cost of their insurance, whilst also recognising an opportunity, as Close Brothers Premium Finance (CBPF) commercial director Steve Wallis explains: “More businesses will be prudent in managing their cash flows and will be looking for opportunities to help them with that so our expectation is more people will look to finance. [And brokers] have the ability to earn as part of the finance the customer takes out to spread the cost of their insurance premiums, which is obviously a benefit.

“And there is a point around renewal retention too, in that if you put a payment method in place that makes it straight forward for the customer to be able to renew, then that is helpful.”

Transaction
To assist brokers in making these transactions easier, CBPF has launched Payment Services which has benefits for brokers and their clients. 

Payment Services’ functionality allows a commercial broker to set up a payment request for a customer and then email them with all the payment options, both in full and by finance. Brokers don’t have to do anything other than create the payment request. Administrative hassle is further removed by managing the process where a credit agreement and a direct debit mandate need differing signatures, with both actions being able to be completed online.

“What [Payment Services] does is help [brokers] not having to worry about reading a script to each and every customer,” comments Close Brothers Premium Finance sales director Paul Trail. “And if I was a commercial lines broker that would sell it on its own because I no longer need to be concerned whether my customer account manager has done the right thing. That’s all taken care of through the technology. Secondly, it gives customers a choice over whether they pay cash, credit card or premium finance.

 Choice
Wallis adds: “For insurance brokers it takes away the effort that is required to present a finance offering and complete the transaction. And from a client’s perspective it is presenting them with a set of choices on how to pay - including different instalment/payment options - so they can assess them and make a payment without any need for manual intervention through a single seamless online journey.”

And whilst it might be early days, Wallis points to signs that those commercial brokers that have bought into Payment Services are already seeing impressive results. “The rule of thumb for commercial insurance broking is they get about 20% of the customers paying by finance; which in our view is some way below what it should be,” he explains.

“And if I look across some of the stats around the performance of Payment Services, scanning down the numbers of all of the brokers that are using it with any sort of regularity are seeing finance penetration numbers above that number; typically, 30% and in some cases even higher. Which proves more people will take finance if it is offered to them online and in a manner that is easy to use and understand.”

 

sharon-bishop

Pandemic creates a new technology zeitgeist for commercial broking

by Sharon Bishop, CEO, Close Brothers Premium Finance

Technological and digital support has never been as important to business survival than as it is today, and broking is no different.

As broking comes to terms with the immense disruption and business chaos caused by the pandemic, operational flexibility and a willingness to use technology are essential to help brokers successfully navigate the current disruption and help businesses cope as they re-open after the lockdown.

The government acknowledged early in the crisis that protecting cashflow would be critical for the economy, and that remains the case today. For millions of businesses, commercial insurance premiums are hardening, albeit slightly, so owners will pay a little more for their insurance when cashflow is likely to be tight, especially in hospitality, travel, taxi and other badly hit sectors.

A struggling economy will add further pressure on businesses to manage their cashflows, including spreading the cost of insurance. It’s why at Close Brothers Premium Finance (CBPF) we’re so excited by Payment Services, which brokers use to give their clients a straightforward, easy-to-use means of choosing how to pay for their insurance. It is a proposition that meets a growing demand to make insurance affordable, and, provides a technology solution for flexible payments in an increasingly digitised world.

Critical
Our February, 2020 broking survey found that 88% of UK brokers offer premium finance to their clients and of those, 75% consider it to be a material, important or critical revenue stream. 64% said it enables clients to purchase cover that they wouldn’t otherwise be able to afford.

For the 88% of UK brokers who offer premium finance, giving clients a choice is already a given. But the new economic reality means they can make premium finance much more integral to their business, especially as increased finance penetration brings additional commission revenue.

Relationships
For commercial brokers, the personal touch in maintaining strong client relationships will always be critical, but in future operational functions, such as premium payments, will be done by AI. And slicker, faster, hassle-free payment systems carrying much more choice is what commercial clients will expect; not only helping to spread their payments in order to stay protected, but to conserve cashflow. For brokers, Payment Services enable them to make a better offer to clients and, resulting in more choice for their clients, as well as offering the potential for increased revenue. Administration is minimal and they don’t have to chase payments. 

Our ambition is that as many as 1000 commercial brokers will use our Payment Services technology in due course, and I’m convinced more compelling technology propositions will be launched that are more attuned to the emerging broking environment.

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