Assurant - Premium Finance Survey

The Financial Conduct Authority (FCA) have voiced concerns around premium finance products. Whilst they describe it as an “essential product” that allows those who may be unable to afford cover to make monthly payments, it also has been called a “poverty premium” as the overall premium paid is actually higher.

The FCA expressed they were “very concerned about the additional cost” for consumers that opted to use premium finance, the credit risk that is charged and the very limited credit risk when it comes to these products.

Assurant provide the premium finance product for the distribution of home insurance products through the Assurant Intermediary panel. 

We conducted a survey amongst advisers to understand their views on the premium finance market, the wider use of premium finance by advisers and their experience with consumers in with their view towards the product.

The key findings are shown below or you can follow this link for the full responses.

Since our survey took place, Which? have also recently published their own research and have urged the FCA to take urgent action against insurers that are charging monthly payment customers the highest levels of interest. 

One key area of concern from our survey is that 59% of the advisers that responded are offering premium finance to their customers without having the credit broking permissions to do so.

This is a danger as the firm must have the correct permissions to offer credit to customers entering into this type of agreement.

Assurant have previously communicated that adviser firms need the necessary credit broking permissions from the FCA to be able to offer premium finance products.
More information about common misunderstanding on consumer credit permissions can be found here