Insurance Premium Finance - cash saver for pressed Owners
A new venture aimed at easing premium flow for the often hard-pressed international marine market and its clients has been launched. Major insurers are reported to have confirmed that they will support what is said to be the first premium finance scheme in the sector. It is managed by a new independent company, Insurance Premium Finance Ltd (IPFL).
The company has secured a line of credit from a leading international bank to underpin premium finance for such covers as Hull and Machinery, and Protection and Indemnity, for ship operators. The financing also extends to cargo owners and charterers, and others taking out insurances in the marine market.
The fresh approach allows insurers to receive their premiums "up front" while enabling their clients to spread the payment of premiums over several installments, in either US dollars, Euros or Sterling.
Neil Barlow, a director of IPFL, said: "At present, domestic insurance business such as household or motor can be the subject of premium finance and the premiums can be paid over several installments. Similarly, for commercial insurance placed within the same market as the country of origin, premium finance can be arranged.
"Our research showed financing of premiums has until now been unavailable for cross-border transactions. For example, a Greek ship-owner arranging cover in the global marine insurance market in US dollars would not be able to obtain finance to spread the cost of the insurances over multiple installments, other than using the existing limited facilities granted by the insurance companies themselves."
The innovation is seen as especially useful in the Hull and Machinery and P&I markets, where IPFL says that the existing recognised installment structures do not work to the benefit of all parties. For Lloyd's brokers, the system looks attractive, as when a first installment is paid to underwriters, Lloyd's automatically debits the subsequent installments from the broker's bank account. Exposure by these brokers to payment of funds not collected by their accounts departments will no longer exist, says IPFL.
For more information contact Neil Barlow on +44 844 871 10 71 or email info@ipfl.info Alternatively log onto http://www.ipfl.info
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