SMEs INSURANCE PREMIUM FINANCE

Insurance Premium Finance (IPF) is a short-term finance product, which enables a client to pay annual insurance premiums over a period by monthly installments. Upon inception of an insurance cover or on renewal of the policy, the client and broker or insurance company agrees on the premium amount.  The broker or insurance company then presents the client with the option to pay cash or take finance through INDEbank IPF facility.

How it works:

The facility feeds on the broker/insurance company – client relationships already existing in the industry.  INDEbank simply comes in to facilitate payments of premium by the SME clients.  Therefore, the broker or insurance company is a strong counter party who even recommends the client to INDEbank who only deals with credible brokers/insurance and credit worthy borrowers (company / person).

Benefits:

To the Client

• Client still derives the benefits of annual insurance as opposed to monthly contracts
• Client is allowed to release more cash to the productive sectors of their business and not carry the “dead cost” of insurance

 To the Broker or Insurance Company

• Guaranteed payment – better credit control – reduced administration and its operating costs
• Increased insurance business volume due to affordability of premiums.
• No debt collection burden and costs
• Increased liquidity
• The insurance company can focus on its core insurance business while INDEbank handles the credit facility administration

Other Features:

• Eligible premiums are those, which are renewable annually with the following exceptions:
• Life Assurance Premiums
• Those falling under policies, which do not provide a rebate on cancellation e.g. Marine Insurance
• Premium adjustments for previous insurance periods
• Short term policies, performance bonds or guarantees
• Tenor: Insurances are renewable every 12 months but the IPF facility bears a maximum tenor of 10 months.
• Proposed Pricing: 1% flat arrangement fee and interest at 3% above INDEbank base rate.
• The facility is denominated in Malawi Kwacha.