How to start an insurance premium financing program

Unlock a new revenue stream. Learn how to launch your premium finance program with our comprehensive guide.

Are you ready to elevate your insurance agency to new heights? If you haven’t considered the benefits of initiating your insurance premium finance program, you are overlooking a golden opportunity. Launching a premium financing subsidiary will add an additional revenue stream, put you in control of delivering superior customer service, and position your agency as a formidable player in a thriving $150 billion/year industry.

Premium finance agents quoting a loan

Table of Contents

Why Launch Your Premium Finance Program?

You’re leaving profit on the table. Our client, COST Financial Group, highlighted a common industry practice in an article published by Insurance Business:

Traditionally, when retail brokers and wholesale agents arrange loans for an insured through a traditional premium finance company, there is only a minimal commission offered by the premium finance provider for bringing in business, Gebhardt explained.

This leaves the bulk of the profit in the hands of a few of the country’s large premium finance companies. These institutionalized big players in premium financing drive the homogenization of the industry.

Insurance Business

This leaves a significant portion of the profit in the hands of a few large premium finance companies, contributing to the homogenization of the industry. The opportunity lies in leveraging capital to create your premium financing program and retaining the entire profit.

Four Compelling Reasons you Should Offer Premium Financing

  1. Diversify your revenue streams: Elevate your financial portfolio with a new source of income that seamlessly complements your existing services.
  2. Take control of your customer’s payment plan: Ensure your clients receive top-notch service with an in-house premium finance program under your command.
  3. Seize market opportunities: Capitalize on the vast potential of the mature insurance market ($150 billion/year industry) with a tailored premium finance solution.
  4. Differentiate yourself from the competition: Differentiate your agency effortlessly in a competitive landscape by offering a valuable and sought-after service.

How Much Money Can be Made?

Our revenue projections showcase the substantial income your premium finance subsidiary could generate. We offer personalized planning and structuring to help you estimate your revenue potential accurately.

Average Premium

Total Contracts

Premiums Financed

Finance Charge Per Contract

Finance Charge On Portfolio

$1,0001500$1,500,000$77.37$116,049
$2,0001250$2,500,000$134.73$168,416
$3,0001000$3,000,000$192.10$192,099
$5,000750$3,750,000$306.83$230,124
$7,500500$3,750,000$450.25$225,124
$10,000250$2,500,000$593.66$148,416 

*Revenue projections are based on an APR of 18% which is, on average, is below the max APR in most States. We will assist you in planning and structuring your program, and provide you with a tailored estimate about how much you stand to make in revenue.

How much does it cost to run?

Today’s premium finance software solutions allows businesses to operate efficiently with minimal overheads. With 98% of labor replaced by automation, you can run your premium finance company seamlessly, leveraging your existing infrastructure.

Navigating Risks Made Easy

The premium finance business model comes with built-in safeguards. When an insured defaults on his/her payments, finance companies simply contact the insurance carrier and collect the remainder of the loan as unearned premium. With collateral in the form of down payment, unearned premiums and the right software in place, risk mitigation is built-in to the model. Third Eye Solutions offers cutting-edge software that automates receivables tracking, ensuring you stay in control even when clients default.

Follow Three Simple Steps to Launch Your Premium Finance Program

1. Obtain licensing with ease

Navigate the paperwork effortlessly with the guidance of our expert legal affairs team. We’re here to ensure a hassle-free process as you obtain the necessary licensing for your premium finance program.

2. Secure funding

Make the most of your existing bank connection to secure initial funding. Third Eye Solutions offers hands-on support and introductions if needed, ensuring a streamlined path to financial backing for your premium finance venture.

3. Achieve operational excellence with our support

Equip your agency with essential tools, processes, and expert guidance. With just 20 minutes a day, you’ll be on the fast track to success. Our comprehensive support ensures your premium finance program operates seamlessly, allowing you to focus on what matters most — growing your business and serving your clients. Here’s what Red River Bank had to say about our service:

 
 
 
“We were looking for a software solution to add the unique facets of premium financing to our suite of commercial lending products…particularly the need to provide a flexible, user-friendly experience to the agent in the field and the insured.  The team at Third Eye delivered in every respect, particularly with the need to have our own documents delivered to the agent and to the insured.  TE said they could do it…..and they did!”
Todd Marye | VP Loan Systems & Service Manager, Red River Bank

Third Eye Solutions Will Be Your Guide

Ready to embark on this lucrative journey? Third Eye Solutions is your trusted partner in launching and managing your premium finance business. We’ll assist with:

  • Obtaining premium finance state licensing.
  • Securing the necessary funding line.
  • Implementing the operating framework, including people, processes, and our advanced software.

See our software in action. Unlock new revenue streams today—launch your premium finance program with confidence!

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