Premium Financing Option Boosts Agency Income

Summary

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Even though rates in the regular marketplace may be dropping somewhat, premium financing is still an attractive option for commercial insureds who prefer paying for their coverages on a periodic basis rather than all at once. However, for some agents and brokers, premium financing is still uncharted territory. One way for an agency to go is to strike a deal with a premium financing company where that company will finance the agency's insureds' premiums at a certain rate of interest. Another way to go, however, is for the agency to set up its own premium financing company. Many agents and brokers can benefit from owning a premium finance subsidiary.

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Extract

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Premium Financing Option Boosts Agency Income

When the property and casualty insurance marketplace is in a "hard" cycle and rates for commercial insurance soar, independent insurance agents and brokers usually find that their clients are anxious to finance their insurance premiums so as not to have to lay out too much money up front. Today, however, the commercial insurance marketplace is softening, with the exception of properties in coastal areas in the N...

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