In the insurance sector, leveraging external financing to facilitate the spread of premium payments is a well-established practice. Many insurers mandate upfront premium payment, particularly for pricier policies. Called 'premium financing,' companies in this space, known as Premium Finance Companies (PFCs), collaborate with agencies and brokers to establish flexible payment options and generate additional revenue streams.
Officials from Treasury Oak, an insurance company, said they believe that the ability to finance premiums not only helps the insured with more attainable coverage and payment terms, but it's also a core function of their business model. Their insureds always finance. Since they've been in business, they've only had 2 (customers) pay up front.
Recent inflation-driven economic changes have further underscored the value PFCs bring to their insurance payments ecosystem. Many consumers and businesses have noticed their monthly insurance payments going up. Average auto insurance premiums rose nearly 14% in 2023, according to a Bankrate study, and sharp increases have been felt industry-wide.
ePayPolicy believes the collision of these three trends - inflation-driven premium increases, customer preference for payment flexibility, and ongoing utilisation of premium finance - will drive rapid adoption of their newest product, Finance Connect. Finance Connect enables insurance companies to offer premium financing options - with their existing premium finance partners - at the point of online payment for their insured customers.
Presenting details about Finance Connect, officials from ePayPolicy explained that the financing offer and terms are presented right at the time of payment. They'll then leverage their existing integrations to streamline recurring payments and payment reminders. Finance Connect is going to help insureds pay faster and bind policies sooner.
Traditional BNPL options have been estimated to increase conversion rates by 20-30%, as well as increasing cart value by 30-50%. But unlike new BNPL entrants, many PFCs have long standing existing relationships with their partners, and need no justification for the value they bring.
Central to the creation of Finance Connect was ePayPolicy’s intent to preserve existing partnerships with PFCs. they didn't want to try and take business from them, or create a marketplace. They want to help both sides work together faster, for the convenience of the insured.
The emphasis on removing manual chokepoints in insurance payments has been central to the company’s product roadmap. Finance Connect is an integrated product for an industry in need of greater digital efficiency and automated back-office operations. ePayPolicy recently introduced CheckMate, an automated check acceptance and reconciliation solution that utilises machine learning, and announced the Payables Connect tools for automating the reconciliation, creation, and payment of market payables.
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