Brokers facing further rising costs

A number of brokers have recently received notification from a lender in the premium finance market, that their rates are rising.  

The rate rises come following news of increasing costs and pressures on brokers from rising IPT, the impact of the Ogden rate cut and other crippling economic pressures.

The premium finance provider Bexhill UK, has confirmed it has no current plans to increase rates or fees. Ravi Takhar, Chief Executive Officer of Bexhill UK comments: “Brokers are being squeezed from every angle and news of these rate rises is bound to concern and anger some brokers, particularly when the reasons given for the rate rises are due to technology spend by the lender.  For brokers that have seen no evidence of these benefits, this rate rise is a bitter pill to swallow.”

An example rate rise of 0.35% on a Personal Lines book of £2m will now cost broker’s in-excess of £7k, which is a considerable amount. This cost has to be either absorbed or passed onto the customer on top of rising costs in premiums and IPT.

An Insurance Broker, who wants to remain anonymous, said: “Customers are already being faced with serious premium hikes so a hike in the finance rates when Bank Base Rate remains unchanged won’t go down well and is going to be a difficult message to deliver. What makes me angry though is the lack of credible justification given for the increase.  It is the finance company’s prerogative to increase rates, but I for one will be looking elsewhere in future for a better rate from a finance provider that can give me and my customers more certainty and control”. 

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