Technology has automated many of the process intensive functions associated with servicing a book of premium finance loans. A well designed software can handle the automated generation of all notices and forms, unlike in the 80’s when these had to be manually typed up.
Multiple other functions such as the payoff amount on a loan or the down payment on an additional policy that had to be calculated manually are handled by a software system designed to support the operation of a premium finance company.
Even the generation of a premium finance agreement that once had to be undertaken by an administrator is automatically printed on approval of a premium finance loan.
Many of the overheads associated with running a premium finance operation is eliminated with the use of the right premium finance software. The net contribution or profit for the revenues that are generated from the finance charge on premium finance loans have been steadily increasing. Premium finance company owners are able to maximize on earning with significantly less overheads than ever before.
Agencies, Wholesalers, MGAs and Insurance companies can leverage their existing infrastructure to start and operate a premium finance subsidiary with minimal upfront investment.
The following projection illustrates the expected revenues that can be made from owning a premium finance subsidiary:
|Average Premium||Total Contracts||Premiums Financed||Fin. Chg. Per Contract||Fin. Chg. On Portfolio|
The revenue projections are based on an APR of 18% which is on average, the allowed APR in most states. We can work with you to plan and structure your program, and demonstrate the profitability of a premium financing operation. Contact us for more information and to find out the feasibility of starting up your own premium finance company.