Mark Foley, managing director at PremFina, on maximising profit by financing your own loans

maximising profit by financing loans

Many insurance brokers generate a significant amount of cash every year. And many among them search for ways to deploy their cash toward profitable activities.

The options available for brokers to invest their money are fairly limited.

They can either put it in a fixed deposit bank account, earning an average 1% per annum, or use it to acquire other brokers with the hope of generating a greater return.

The first option certainly doesn’t allow brokers to make the most of their capital. The latter requires significant management time and doesn’t guarantee the expected returns.

A less obvious way for brokers to increase return is to invest their cash towards premium finance book. Premium finance is a £10 billion market.

Of that, more than two-thirds of premium finance is provided by premium finance companies. What share of this sizable market do brokers tap into? Not quite enough.

Maximising profit

By utilizing a premium finance company for the financing of insurance, brokers are leaving money on the table.

This is why they should consider financing their own loans. Doing so would allow them to keep the full interest margin rather than just being paid a commission, as well as gain some of the administrative fees generated when customers change agreement specifics.

They would also gain more control over their client relationships, instead of handing them over to a finance company.

In an environment of increased competition, continuously low interest rates and a slow growing market, brokers’ own premium finance business could be just what’s needed to maximize profit.

In the process, they get more autonomy and decision-making power to manage their clients, set financing rates and make more appropriate commercial decisions for their business.

They’re also able to cross-sell and up-sell additional insurance products. That’s in addition to the higher profit from the boost in revenue from selling more premium finance.

If you’d like to find out more about how you could increase revenue and profit via your own premium finance facility, please contact, or call us at +44 (0) 203 500 3462.