Competition is good for brokers and customers

Seàn Kemple discusses how premium finance aims to support brokers in the future.

As the (fairly) recently arrived managing director of Close Brothers Premium Finance (CBPF), I am looking forward to meeting the challenges in broking and premium finance brought about both by the pandemic and the emerging competitive landscape.

Of course there have been a number of changes in the senior team at CBPF, which is a natural cycle of business, but we have been at the heart of providing premium finance for broking for over 40 years and we are as committed to our broking partners in the UK and Ireland as we ever were.  That means helping brokers thrive, especially during these volatile times.

I am personally excited by the opportunities that are presenting themselves as broking moves beyond the pandemic and embraces the changes that have revolutionised how brokers deliver products and services to our clients and customers. 

Competition 

Competition brings with it a wider choice for brokers and their customers, but it encourages established players to enhance their own propositions in order to stay ahead of the pack. For CBPF, that means using our unique expertise and experience to maximise the emerging opportunities for broking in the 2020s. 

These opportunities are driven by technology and evolving customer demands, and broking needs to move fast and reinvent itself, while keeping the best of its traditions. CBPF partners with 1,600 brokers in the UK and Ireland, giving us an unprecedented level of insight into how broking is shaping itself to do business during the rest of the decade.  

While commercial and personal lines broking are at different stages in the technology revolution, they both require the highest quality service and support for premium finance services.  

Analytics

Insurance distribution is now the province of data analytics; with the right tools brokers can, with our help, assess at the point of quote how they expect customers to behave, whether they are a bad debt risk, what their claim history is and how they’re expected to pay their premium. 

However, it is not just in volume personal lines where data capability is now an essential requirement.

In volume commercial lines, such as van insurance, or small retail, we are already seeing commercial brokers using data enrichment techniques to improve risk selection.  

The value of personal relationships cannot be underestimated where commercial clients are concerned, but in truth we never thought virtual meetings would be OK until we had to do them, and the same will apply to data analytics. 

Premium finance providers like CBPF need to do the heavy lifting and develop the new kit, but thanks to our depth of insight, we already understand where the pinch points in the finance process are, and we will be investing to take the sales and administration of premium finance to a new level of efficiency.  

Revolution

Finally, personal lines broking is on the verge of another revolution as a result of the new FCA pricing regime for home and motor. The premium finance sector must step up to the plate and support brokers as they face into this significant challenge. 

Already the effects of the pricing reforms are being felt, in the form of intense price competition from direct writers as they position themselves for 2022.

As we have seen previously, it’s sometimes hard to predict the consequences of reform, but what is important for brokers is that they know their premium finance providers are onside and fully supporting them when the reforms play out next year and beyond.

Taken from Insurance Age.