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Blog: Empowering brokers, enhancing affordability - the power of premium finance training

Allen Seldon, director of product and proposition, Close Brothers

Premium finance has two core benefits; it enables brokers to offer their clients and customers a way of spreading the cost of their insurance to make it more affordable with a better fit to their monthly budget, more important than ever during the cost of living crisis. Secondly, finance provides brokers with a non-risk revenue stream; appropriate premium finance commission income is valuable to a brokerage’s bottom line.

Insurance Age, in association with CBPF, asked brokers for their views on premium finance in our annual Broker Barometer Survey, 2022.

There was broad agreement among personal and commercial line brokers that premium finance enables clients to manage better cash flow (78% agreed) and makes insurance easier to afford (69%). 40% said they experienced increased demand for premium finance in the last 12 months, and 53% expected demand to increase as households and businesses feel the pinch of inflation.

Feedback from brokers made it clear that awareness of the revenue opportunity can still be gained from premium finance. However, 21% of brokers who do not offer finance to their clients and customers felt they needed more training to sell the product successfully.

A further 5% of brokers were worried that clients might use it as an opportunity to rebroke. And 21% were unaware that premium finance is an option.

To alleviate these concerns and boost the revenue opportunities from premium finance, training brokers to sell premium finance is vital to help maximise their revenue and enhance their client relationships.

Training a difference maker

Training brokers can make a real difference. CIPD-accredited training modules delivered face-to-face and virtually – focusing on relationship management, financial awareness, building resilience, and sales best practice – have been proven to drive better outcomes for brokers.   

The modules also include sessions on the skills and behaviours needed to be successful in sales techniques. These skills are designed to improve finance sales but are also valuable for account executives beyond selling premium finance.  

Close Brothers undertook a training programme across its broking partners between August 2019 and July 2020, including during the pandemic. A year on, the impact of the training programme was measured, with some striking results.

This included the fact 73% of brokers who underwent training saw increases in new cases (clients taking out premium finance). On average, brokers experienced 35% growth in new cases post-training.

The Broker Barometer Survey also found that 11% of brokers don’t offer premium finance to their clients, while take-up is 10% or less among one-fifth of brokers and less than 25% among a quarter of brokers.

Only 3% of brokers find that 75% or more of their clients and customers opt for finance, so there is significant headroom for increased finance penetration in the intermediated market.

Premium finance sales training underscores the value to be gained by brokers enhancing their understanding of, and ability to offer, premium finance, especially in the current, more challenging market.

Not only does premium finance drive additional broker revenue, but the survey findings demonstrate that brokers recognise additional benefits as a protection for customers navigating their way through the cost of living crisis. By offering premium finance, brokers avoid missing out on a win-win for themselves and their customers.

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