Effective October 1, 2021, the FCA Rules PS21.05 effectively change the way that insurance products can be sold by firms, to read further here.

In a nutshell, the FCA wants to stop insurance brokers charging to spread the cost of insurance premiums, although, this may not please some brokers, this does present an opportunity.

The changes will liken selling premium finance to purchasing a sofa, where customers can pay monthly at O% interest.

Companies like Klarna and PayPal offer the buy now pay later model with no interest, that model of paying offers a more flexible way to pay for products.

As more consumers use this form of payment in their everyday purchases, the more they will expect it when it comes to paying for a range of products, including insurance.

‘Open Banking’ can reduce the risk for brokers, by determining if the customer can afford the repayments.

Orchard Funding Ltd is offering brokers the option of using our ‘Open Banking’ service to determine whether their customers can afford a policy, whether the customer chooses to spread their insurance premium payments or not.

This allows the insurance broker to know the ‘quality’ of their customer, hence less risk and can result in customers securing a lower insurance premium, so beneficial for both the customer and the broker.

For more information on how ‘Open Banking’ can help your insurance business.

Contact: Chris Meyer

Phone: 07854 380900

Email: chris.meyer@orchardfunding.co.uk

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