Foreword

Some major developments are taking place within the premium finance sector. And, although the premium finance supplier still suffers from the perception of being something of a one-act play - after all, how complicated can the supply of credit be? - the reality is that ours is an industry that has experienced some fairly seismic upheavals over the last five to seven years.

From its old incarnation as a Heath Robinson business operating behind the scenes of the insurance industry, premium finance has developed into a sophisticated cash-management tool for both entrepreneurs and established businesses alike. Where, once, credit in our society was a dirty word, now it is fully accepted and, indeed, often sought after. In fact, we have reached the interesting state of affairs in which individuals and businesses that do not utilise credit are almost viewed with some suspicion.

But, the growing acceptance of credit as a means to an end is not the only change the industry has experienced during recent years. New technology has transformed many aspects of the insurance industry, and, although something of a laggard when it comes to modernisation, the premium finance sector has grasped the nettle and pretty much reinvented itself since the late 1990s. Granted, not every broker wants to use the full potential of the technology on offer, but at least the option is there. Ten years ago it was a matter of relying on the telephone and written correspondence.

The advent of new technology has also led to a major debate on service levels in the industry and whether some of the premium finance providers' reliance on technology has led to a drop in service levels and a lack of customer contact. You will read more about this particular issue in aascent's sales and operations director Ed Ferrell's article on pages 13 and 14, in which he looks at what has become known as the high-tech/high-touch debate.

In addition, the growth of the Financial Services Authority's remit over brokers and intermediaries is leading to questions being asked about whether premium finance itself could be the next focus of the regulator's attention. If this proves to be the case, there will be plenty to attract the FSA's attention. Issues such as the use of advance commissions and rolling credit agreements could cause a few raised eyebrows when seen in the light of the new thinking on best advice. Similarly, following on from my earlier reference to premium finance as an aid to finance management, the decision to recommend premium finance becomes a much more complex issue, not simply the question of whether or not a client can afford to pay. New thinking leads us to believe that most businesses could benefit from the use of premium finance rather than paying their premiums in a lump sum or paying the high service charges of the insurers.

These, then, are just some of the issues bubbling under the surface of what, from the outside, may appear to be a rather commoditised and dour part of the insurance sector. But don't be fooled by our outwardly calm appearance; premium finance is a fiercely competitive industry full of deep-seated rivalries. It has its characters, its challenges and, of course, its evolving issues.

But anyone who believes that premium finance is purely about rates is missing the point. Our industry has moved on since those days. Today's brokers, according to a survey by Insurance Research and Strategy commissioned by aascent, suggest the quality of service and ease of use are now just as important to them as rates when selecting a premium finance provider.

I like to think that, as an industry, we have now reached a level of maturity and sophistication that puts us on a par with our colleagues in other sectors of insurance. And, with opportunities like this Professional Broking Premium Finance supplement, we can tell our story to the wider insurance market and keep people up to date with the very latest developments.

So, this is our story. It is a fascinating one, full of twists and turns and the occasional mystery like any good story. But it is also a story that is far from finished, with new chapters being written all the time.

So read on, and find out just what the premium finance industry has been up to.