5 Benefits of Offering Insurance Premium Financing

by Uncategorized

Premium financing is a financing arrangement that enables individuals and businesses to pay for their insurance premiums over time, rather than paying for them in full upfront. It works by allowing the borrower to obtain a loan from a premium finance company to pay for their insurance premiums, with the borrower repaying the loan over time with interest.

Offering premium financing presents various advantages for insurance companies and their customers. Because premiums can cost upward of thousands or tens of thousands of dollars, it’s become an industry staple for insureds to alleviate the cost of payment.

Why Offer Premium Financing?

  1. Attract New Customers
    Premium financing can be an attractive feature for potential customers who may be interested in purchasing insurance but are deterred by the upfront costs. By offering financing options, insurance companies can tap into a broader customer base and increase their sales volumes. This can also set you apart from competitors.
  2. Increase Customer Retention
    Premium financing can also help insurance companies retain their existing customers. It provides a convenient and flexible payment option, ensuring that customers can continue their coverage without financial strain. By offering financing, companies demonstrate their commitment to customer satisfaction and create a sense of loyalty.
  3. Financial Partnerships and Diversification
    Insurance companies that offer premium financing can form strategic partnerships with premium finance companies. These partnerships provide a reliable source of financing for customers, as well as potential cross-promotion opportunities.
  4. Revenue Generation
    Premium financing can create an additional revenue stream for insurance companies. While policyholders repay their premiums over time, the insurance company receives the full premium amount upfront from the premium finance company. This can improve cash flow and generate interest income on the financed premiums.
  5. Mitigate Risk
    Premium financing can help insurance companies mitigate the risk of non-payment. By partnering with a premium finance company, the insurance company transfers the credit risk associated with premium payment to the finance provider. This reduces the likelihood of policy cancellations due to payment delinquencies and helps insurance companies maintain a more stable customer base.

What About ePayPolicy? 

ePayPolicy recently announced a new product that enables insurance companies to offer premium financing options. Finance Connect allows insurance companies to work with their existing PFC partners to offer easy financing at online checkout. This new product “is going to help insureds pay faster and bind policies sooner, helping both insurance companies and their PFC partners,” said CTO Nish Modi.

Finance Connect combines the ease of integrated online payments with financing at checkout to help improve conversion rates and eliminate back-and-forth with your PFC partners. Finance offers and terms are presented up front, and PFAs are auto-generated. Once enrolled, auto-payment and payment reminders make payments and communication with insureds effortless. 

Learn more about Finance Connect here.

New Product – Finance Connect

by Digital Payment ProcessingIndustry News & Company Updates

We’re thrilled to announce the addition of Finance Connect to our suite of insurance payment and reconciliation products for insurance companies. Finance Connect enables insurance companies to offer premium financing options – with their existing premium finance partners – at the point of online checkout for their insured customers.

“Premium financing is essential in our industry because it gives customers greater payment flexibility with financing options,” said CEO Mark Engels. “We’re combining the ease of integrated online payments with financing at checkout to help improve conversion rates for our customers and eliminate the manual aspects of enrollment in a financing agreement with their partners.”

ePayPolicy has over 6,500 customers in the insurance industry, including Premium Finance Companies (PFCs). Existing customers will have early access, with integrations to their existing PFC partners to ensure a seamless experience for all parties involved.

“As premiums increase, access to financing becomes more important,” said CTO Nish Modi. “Finance Connect is going to help insureds pay faster and bind policies sooner, helping both insurance companies and their PFC partners.”

Finance Connect is the latest integrated product for an industry in need of greater digital efficiency and automated back-office operations. ePayPolicy’s founders experienced firsthand the operational pains of check collection and manual reconciliation in insurance, which led to the company’s first product – secure, online payment pages that were fully customizable to match the insurance company’s brand. 

ePayPolicy recently introduced CheckMate, an automated check reconciliation solution that utilizes machine learning, and announced the Payables Connect tools for automating the reconciliation, creation, and payment of market payables.

Finance Connect is the next of several product releases, with the goal of continuing to streamline the accounts payable, receivables and disbursement experience for customers in the insurance industry.

“We want to be the place our customers go to reconcile their payables and receivables and to tie it all together with their existing accounting solutions,” said Modi. “We’re building an industry-wide network that allows money and the associated data to flow freely through the industry while saving time and providing security for our customers.”

Key Features

  • Allows insurance companies to work with their existing PFC partners
  • Premium financing options presented at checkout alongside option to pay in full via ACH or credit card
  • Auto-payment enrollment and payment reminders for enrolled customers
  • Simplified financing enrollment and upfront terms for insureds
  • Easily generates consolidated premium finance agreements (PFAs)
  • ePayPolicy is integrated with over 90% of the most popular agency management systems, saving time and manual data entry

How Digital Insurance Payments Can Optimize Your Business

by Business StrategyDigital Payment Processing

A lot of people seem to have the misconception that implementing a digital payment option for their business is a big undertaking. In reality, not only can the process be easy, but it can also greatly enhance the customer experience. More and more consumers now have the expectation of being able to pay for services with credit card or ACH. Younger consumers, especially, don’t even own a checkbook.

Businesses that don’t offer digital payment options risk falling behind their competitors and losing customers. And if you feel like you have a more traditional customer base, you can still accept checks but also offer the option of digital payments for those who prefer it (and at ePay we even offer a way to make paper checks as easy as online payments).

Here are some ways digital payments benefit insurance companies:

1. Improve the Customer Experience
Many customers find the traditional payment process for insurance premiums to be time-consuming and cumbersome. By offering digital payment options, insurance companies can make the payment process faster, more convenient, and more secure. Customers can pay their premiums from anywhere, at any time, using their preferred payment method.

2. Reduce Manual Labor & Streamline Accounting
Traditional payment methods, such as checks and cash, require manual processing and handling, which can be tedious and costly. By implementing digital payment options, insurance companies can automate payment processing and reduce the need for manual handling. This also ensures accuracy of data and streamlined accounting.

3. Reduce Risk of Payment Fraud
Digital payment options, such as credit and debit cards, offer advanced security features that can help to prevent fraud. Additionally, digital payment processing systems can be configured to detect and flag suspicious payment activity, which can help to prevent fraudulent transactions.

4. Stay Competitive
In today’s digital age, customers expect businesses to offer a range of payment options. By failing to offer online payment options, insurance companies risk falling behind their competitors and losing customers.

 

In summary, implementing digital payment options is not a big change for most businesses, and it can provide numerous benefits for insurance companies. ePayPolicy is fully committed to simplifying the payment collection process for insurance companies. Our sign up request form takes 1 minute, and then our underwriting team reviews your submission and requests any additional details to verify eligibility. Once approved, our team sends final account signup instructions so that you can start collecting payments within 24 hours.

Easy sign-up with no contract, no signup fee, and you can cancel at any time.

 

30 Insurance Terms You Should Know

by Uncategorized

The insurance industry is an integral part of the modern economy, providing protection and peace of mind to individuals and businesses alike. With a wide variety of insurance products available, it can be overwhelming to navigate the terminology and concepts associated within the industry. That’s why we’ve put together a glossary of common insurance industry terms.  Whether you’re an insurance agent, broker, or policyholder, understanding these terms can help you make informed decisions and ensure that you have the right coverage for your needs.

The terms:

  1. Policy – A contract between the insurance company and the policyholder that outlines the coverage provided.
  2. Premium – The amount paid by the policyholder to the insurance company for coverage.
  3. Deductible – The amount the policyholder must pay out of pocket, in the event of a claim, before the insurance company pays their portion.
  4. Coverage – The amount of protection provided by an insurance policy.
  5. Claim – A request for payment made by the policyholder for a covered loss.
  6. Underwriting – The process by which insurance companies evaluate the risk of insuring an individual or entity.
  7. Risk – The likelihood of a loss or adverse event occurring.
  8. Insured – The person or entity covered by an insurance policy.
  9. Insurer – The insurance company providing coverage.
  10. Liability – Legal responsibility for something, such as an accident or damage.
  11. Umbrella policy – An insurance policy that provides additional liability coverage over and above your other insurance policies (protection against your assets if you were to be sued). You can have a personal umbrella policy which covers your home and auto, and then you can have a business umbrella policy which covers your business assets and commercial autos.  
  12. Endorsement – A change or addition to your insurance policy.
  13. Renewal – The process of continuing coverage under an insurance policy after the initial term has expired.
  14. Exclusions – Situations or events that are not covered by an insurance policy.
  15. Inclusions – Situations or events that are covered by an insurance policy.
  16. Benefit – The amount of money paid out by an insurance company for a covered loss.
  17. Agent – An individual who sells insurance policies and represents an insurance company.
  18. Broker – An individual or firm that acts as an intermediary between insurance companies and policyholders (can also be an agent).
  19. Indemnification – The process by which an insurance company compensates the policyholder for a covered loss.
  20. Actuary – A professional who uses mathematical models to evaluate the financial risk of insuring individuals or entities.
  21. Rate – The cost of insurance coverage, often expressed as a monthly or annual premium.
  22. Underinsured – A condition where the amount of insurance coverage is insufficient to cover the potential loss.
  23. Overinsured – A condition where the amount of insurance coverage on your policy is more than the potential loss (you are paying for more coverage than you can actually use).
  24. Cancellation – The termination of an insurance policy before the end of its term.
  25. Policyholder – The person or entity that holds an insurance policy.
  26. Subrogation – The process by which an insurance company seeks to recover costs paid out for a covered loss from a third party.
  27. Adjuster – An individual responsible for evaluating and settling insurance claims.
  28. Loss ratio – The proportion of premium dollars spent on claims and company expenses, compared to their profits.
  29. Insurance Fraud – Deception committed in order to obtain payment from an insurance company for a covered loss that did not actually occur.
  30. Solvency – The financial stability and ability of an insurance company to pay claims and meet its obligations.

 

We hope this glossary is a helpful resource for those within this industry. Understanding these terms can help you communicate more effectively with clients, evaluate risk and coverage options, and navigate the complex landscape of insurance products. As the insurance industry continues to evolve and adapt to changing market conditions, it’s more important than ever to stay informed and up-to-date on the latest trends and developments. By staying informed and knowledgeable, you can ensure that you’re providing the best possible service to your clients and protecting their interests for years to come.



Case Study: MGA is First to Launch Automated Check Reconciliation

by Client Spotlight SeriesDigital Payment Processing

Bailey Specialty Risks, Inc. (BSR) recently launched CheckMate, our machine learning powered check reconciliation solution, becoming the first customer to utilize every ePayPolicy service. 

As a wholesale insurance MGA that offers professional lines, their journey with us has been unique, and it continues to broaden and deepen.

An indirect route to digital payments

BSR has been offering digital payments since 2017. Vickie Harmon, Vice President & CFO, says, “Our customers were not coming to us saying ‘Oh, I wish I could pay online.’ They were saying ‘I wish you would offer direct bill.’ She categorically could not. She also wondered if offering electronic payment to her agents would meet with resistance. But she checked out ePayPolicy and some other payment processors.

Milan Malkani, ePayPolicy Co-founder, convinced Vickie to try it. He promised that If she liked it, we could go deeper and customize it for BSR. Vickie picked a few agents she knew were tech savvy and had the type of business that would benefit from digital payment. She had some good response, although there was some pushback at first about who pays the ACH and credit card fees. Because of ePay’s ability to pass fees or absorb them, they have found a solution that works for them and their partners.

Integration with AMS

BSR uses Vertafore’s AIM, and integrated ePayPolicy fairly early on. Fast forward to 2022. Vickie says, “I was on the hunt for a new agency management system. AIM is not an ideal fit for our specialty business.”

At a conference she found herself at dinner with an amiable payment processor rep. She says: “I agreed to view a demo, and at every step asked questions like” ‘Who pays the fees? What about integration? What about dunning notices? We can pay our carriers as outgoing payables?’” She reports: “They had nothing, and they’ve been in business almost as long as ePayPolicy! No one else in the marketplace is offering the breadth of services you do.”

In the end, she stayed with ePayPolicy, and also decided to keep AIM. Vickie talked about a deposit reconciliation problem she encountered shortly after the integration. Suffice to say it got resolved once she brought it to our attention and ePayPolicy introduced Batch Deposits. Another milestone in our relationship was when Milan suggested ePayPolicy could send out Notifications of payment due.

Automated check processing

Most recently, BSR became our first customer to use CheckMate, our automated check processing service that consolidates check payments and digital payments in a single dashboard. Vickie says, “We have to create the payment in AIM regardless. Before CheckMate we would create the check in AIM and go through several extra steps to mail it. Now I export it to ePayPolicy and it goes to a safe digital lockbox, and I don’t have to think about it.” She loves having the same process in CheckMate as she has for electronic payments. She only wishes more carriers would sign up for a recipient account to be paid via ACH.

Biggest business benefit to BSR

Vickie credits ePayPolicy with creating an “incredible efficiency.” The accounting people get notified and they can stay on top of payables. “ePayPolicy makes it easier for those in our agencies to pay us timely. Operations people like us. They say, ‘they are so easy to work with. I can pay them in no time.’ Vickie says anything that gets people talking positively about BSR is a good thing. 

Advice to others on the fence about digital payment

“Just try it,” she advises. “There’s a really low barrier to entry. It’s a whole other way of doing business. Automated payments free up your time. Even if it’s five minutes, that’s five minutes you can spend on other things that aren’t not payment related.”

About BSR

Bailey Specialty Risks is a specialty insurance wholesale broker located in Hendersonville, Tennessee.  BRS offers coverages that include Professional Liability, Management Liability, and Privacy & Security/Cyber Liability. All business is written with licensed/contracted Retail Insurance Agencies throughout the United States

CS&A Insurance Gets Paid Lightning Fast with ePayPolicy

by Client Spotlight Series

Accounting Director Carrie Davis describes how her agency came to offer digital payments. Several CS&A clients had been asking about paying their premiums with a credit card. She looked into options through their AMS vendor. But it seemed complicated and expensive and “not something we wanted to deal with.”

Then, one of their agents got introduced to ePayPolicy at a conference and brought back some literature. Carrie was struck by the simplicity and low cost and called ePayPolicy to learn more. 

The introduction of digital payments through ePayPolicy in March 2020 turned out to be both smart and timely. CS&A launched right before COVID hit, just as businesses started shutting down. From there, “it just took off.”

Primary Problem

Carrie says, “Our biggest collection headaches were slow payers and waiting on the mail to get here.” Enabling clients to pay with a credit card or via ACH has significantly sped up CS&A receivables. This was especially notable during the mail slowdown during the pandemic.

Client Acceptance

The agency’s clients were quick to jump on the digital payment option. All they have to do is click on a link. Carrie reports: “Our CSR account managers have payment links in their emails. We have a link on every invoice.” Plus, there’s a big, green “Pay Now” button right on the CS&A website.

She says most clients like earning points for their credit card payments, although some are paying with ACH.

Carrie doesn’t hesitate at all when asked what her favorite feature is – the ease of use. “It’s easy for us, and for the insureds as well.”

Biggest Benefit to CS&A

“It’s so much quicker to pay now. Sometimes we even get payment before the invoice goes out! We are just waiting for the money to get in once we get the batch report,” notes Carrie. “It’s really improved our collections.”

Advice to Other Agencies

If your agency is just beginning to explore offering digital payments or is actively researching providers, Carrie recommends ePayPolicy. She advises: “Sign up. Just do it. I don’t see any reason why you wouldn’t.”

About CS&A Insurance

Franklin-based Chappell, Smith & Associates (CS&A Insurance) offers a one-stop-shop for commercial, employee benefits and personal lines coverage. The agency’s specialty divisions serve the hospitality, construction and aviation industries and the unique risks of high net worth clients. Focused expertise, service and good old-fashioned courtesy have kept this esteemed agency growing since 1881 (as Chappell, Smith since 1981).

Digitize Payments to Increase Customer Satisfaction…and More

by Digital Payment Processing

The trend is clear. People today prefer to pay digitally. That includes everything from Amazon purchases to their monthly utility bill – and yes, their insurance premiums! While there are still a few diehard check writers out there, digital transformation is here to stay. 

The Many Benefits of Digital Payments

Customer convenience is often cited as the main reason businesses offer digital payments. And statistics bear that out. In a survey of billing executives, 97 percent reported higher customer satisfaction as a benefit of digitizing payments. The report, called “The Digital Edge”, also found other key business benefits, such as: reduced collection times (86.5%), increased operational efficiency (90.8%), cost reductions (81.6%) and gaining a competitive edge (92.3%).

Who wouldn’t want to collect payments faster and more efficiently, at less cost, and gain a competitive edge?

Do Your Research

As you know, the insurance industry has historically not been an early adopter of technology and innovation. However, that is changing. ePayPolicy has customers that have been using our digital payment solution for five or more years. 

The pandemic also created a spike in insurtech adoption, as the industry turned to technology for remote team communication, customer relationship management and more. Customers and accounting teams needed no-touch payment options not only because of the risk of Covid, but also because checks being delivered to an empty office was of no use. Many of the habits left by the Covid pandemic are here to stay.

Where to look and what to look for

Which payment system is right for your organization? Read reviews, ask your state association rep (or look on their website for preferred partners), talk to your IMS provider. Which payment processor do they recommend? You want a system that streamlines internal processes, expedites receivables and integrates well with other systems already in place (or planned). 

Because of the fiduciary nature of collecting insurance payments, a generic payment system built for retail transactions is likely not the best choice. You will want to focus your search on solutions designed specifically for the insurance industry. This will give way to insurance-specific features like management system integrations, and you can also rest assured that customer support will understand your specific problems when needed.

Try Before You Buy

Compare apples to apples. Understand what your payment processing vendor charges for setup, as well as their monthly subscription fee. Do they offer a free trial? Do you have to sign a multi-year contract? What kind of training/support do they provide?

At ePayPolicy, we offer 60 days free to new users, no contract or set-up fees. 

Customer Adoption is Key

According to The Digital Edge survey, one of the biggest hurdles to digitization is employees with insufficient technical skills (59.6%). Be sure to choose a digital payment system that’s easy for your employees to use. After all, they will be the ones behind customer adoption.

Encourage everyone to advocate for digital payments. Announce proudly to customers (and prospects) that you now take payments online. Promote it across your website, newsletters, press releases, ads and social media. This will be welcome news! But don’t count on customers to remember from one payment to the next. 

Put a “Pay Now” link on your invoices, in your emails, and a big, can’t-miss button on your website. Show customers how simple it is to pay their premiums through your digital payment portal. Increased loyalty is definitely part of customer satisfaction!

With so many business benefits and literally no downside, isn’t it time to prioritize digital payments?