Premium finance programs don’t grow on trees. Instead, they are built over time with a combination of resources including knowledge of the financial sector, careful management and attention to detail. If your premium finance programs are due for an upgrade, it’s important to think through the qualities you need in a business partner.
Too many financial institutions operate premium finance programs as a distant second to the other divisions of their business. There simply isn’t enough time during the work week to think strategically and develop a long-term vision for premium finance. That often means its true revenue potential within your organization isn’t captured.
Keep these points in mind as you weigh the merits of various premium finance programs in our industry. With an outstanding support system, the buy-in of your team and continued interest from customers, you can transform the programs you offer into something greater. The revenue you generate from this kind of arrangement can be substantial. Consider whether it might be time for a change.
Factors to seek out for premium finance programs
Perhaps the greatest hurdle to adopting robust premium finance programs is a lack of experience with programs that actually work well. Many executives have come to view premium finance as an exercise in spending time and money that doesn’t generate the necessary ROI. Yet our company has developed a sound methodology for taking premium finance and turning it into something much greater and more consequential for your organization.
As you think through premium finance options on the marketplace, keep these factors in mind to ensure the program you integrate is aligned with your mission, vision and values.
Factor No. 1: It should be profitable. There’s no point in investing hard-earned money, time and energy in a project that won’t move the needle for your company. With our organization, typical clients average between $30,000 and $40,000 in net profit per $1 million financed. Our clients also are the recipients of finance-charge revenue, late fees and cancellation charges. There are very few fixed expenses because we only receive a small service fee. Keep in mind you have the ability to invest funds in your new premium finance arrangement, which can drive growth considerably. http://costfinancial.com/profit/
Factor No. 2: It should be easy to manage. Turnkey solutions are essential in today’s busy marketplace, which is one of the main reasons we developed this program. We will guide your team through the licensing progress and paperwork including premium-finance agreements, disclosures, monthly billing statements, reinstatements and more. We’ll also assist with license applications and we will customize our online quoting system to ensure your company’s needs are met. As our partnership develops, we can connect you to banks as you seek lines of credit. Our objective is to effectively manage risk by setting appropriate down payments and collecting payments in a timely way.
We will set up a deposit-only bank account that connects directly to your premium-finance company, but we will not hold any signature authority on it. We have the appropriate insurance coverage and can even set up a lockbox service to make payments easy.
Factor No. 3: It should be technologically advanced. The financial world depends on technology to keep up with the pace of change. We have built our online quoting system with help from leading technology vendors including Amazon Web Services and RedHat. This secure system connects you with all of the latest data you need about your premium-finance customers. Using this resource, you can submit contracts electronically, manage them individually, track bills and more.
Those are just three of the many reasons financial institutions choose to work with us. If you are interested in elevating your premium finance programs, we encourage you to reach out to our team at COST Financial Group or call 800-844-2678.