Paying for insurance during significant economic disruption
Premium Credit has undertaken a series of studies and unique market analysis to gauge sentiment towards buying insurance and the use of credit – among personal, SME and corporate customers in 2020.
The findings form part of the first Premium Credit Insurance Index. In particular, the research and analysis focus on the impact of Covid-19 on the purchase of insurance and how personal, SME and corporate customers have changed buying habits and shifted priorities in the wake of the pandemic.
The Index shows some interesting findings not least that premium finance has an increasingly central role to play in helping consumers and businesses better manage the cost of buying insurance – it enables them to pay monthly for cover instead of in a lump sum which can help with cash flow and payment challenges.
The research outlines that more needs to be done to inform these markets – currently only around 7% of consumers say they use premium finance, for instance. Research from the Index showed SMEs using more expensive means of credit have suffered financially with 46% defaulting on interest or capital repayments in the past year while 54% worry they may default in the year ahead. Premium finance can help manage cash flow far more effectively – particularly at this current time of economic hardship.
Adam Morghem, Premium Credit’s Strategy & Brand Director said: “The financial pain of COVID for millions of households is mounting and insurance is one of the bills that people are cutting back on to save money. The affordability issue was already a major concern for households before the pandemic with average bills rising 14% in a year – way ahead of inflation – and making it more difficult for people to pay for the insurance they need and value.”
Owen Thomas, Premium Credit’s Chief Sales & Marketing Officer added: “Premium finance has become a very cost-competitive means for consumers and SMEs to buy insurance and better manage their finances through spreading payments. At a time when insurance is becoming more expensive it can be a good alternative to other forms of credit.”
Authored by Premium Credit
The Premium Credit Insurance Index can be downloaded HERE
We are the leading provider of premium finance in the UK and Ireland, and the only company endorsed by BIBA. We are authorised and regulated by the Financial Conduct Authority, and work with over 3,000 producers of all sizes. We serve over 2.1 million customers, process 24 million direct debits and receive advances of £3.5 billion.
For over 30 years, we’ve led the market through thought leadership, innovation and technology and have helped our partners offer finance compliantly to their customers through face-to-face, telephony and online channels.
We continue to invest to ensure we provide a quality service and support that helps you grow your business and commission. From the delivery of a seamless customer journey, which includes real time decisioning for financing and 24/7 account servicing, to consultation that improves the offer of finance to customers, we are committed to growing the premium finance market.
Our Specialist Lending division also provides finance to pay other annual costs, such as professional fees, membership subscriptions, commercial service charges, golf clubs and school fees.
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