Legislative changes are creating significant opportunities for the world of premium financing, according to IQumulate New Zealand manager Graeme Gordon (pictured), and here he talks about the impact of legislation as well as the rising demand for premium funding as insurance costs maintain their upward trajectory.
“Premium funding is currently sitting in somewhat of a sweet spot,” Gordon told Insurance Business. “There have been significant changes in the lending market caused by changes to the CCCFA (Credit Contracts and Consumer Finance Act), which has increased compliance requirements and lending due diligence as a result. It has been well publicised that this is having a big impact on banks and other lenders.
“Due to the nature of our product, the premium funding industry, however, received an exemption from two key elements of the CCCFA, which provides real ease-of-use benefits when compared to other lending products, which will likely increase demand for premium funding as a result.”
Earlier this month, Commerce and Consumer Affairs Minister David Clark said practical amendments were being made to responsible lending rules to curb any unintended consequences being caused by the CCCFA.
“The amendments we are making are informed by the feedback I received from banks, other lenders, and consumers,” noted Clark at the time, “and sit comfortably within the intent of the Act. These initial changes ensure borrower-ready Kiwis can still access credit while we continue to protect those most at risk from predatory and irresponsible lending.”
Meanwhile, Gordon cited the appetite within the broking space, a sector which, in IQumulate’s view, will continue to look for smart offerings.
He declared: “There are also significant opportunities with more and more of the broker market looking for smarter solutions, quality service, and a relationship they can rely on.
“Premium funding is often the last piece of the insurance puzzle. For this reason, it is essential we have systems in place to allow brokers to quickly and easily obtain premium funding solutions, but equally to allow our end customers to easily view, understand, and accept these agreements.”
Manned by a workforce of over 70 people across Australia and New Zealand, IQumulate has a flagship system, called “Edge,” that allows brokers to create premium funding quotes either through their respective broking systems or via IQumulate’s website. It is also through the Edge portal that loans are renewed and endorsed.
“Coupling [the above] with prompt sales turnaround times, and same-day contract processing, means we are front of mind when it comes to ease of use,” asserted Gordon. “With the pace our industry moves, these are two key factors to making the most of opportunities and in developing lasting relationships based on quality service, which has seen our business grow considerably.”
Additionally, according to the NZ manager, the company’s team in Auckland is expanding to accommodate the continuing growth of its portfolio.
The firm also has a free broker education and insights programme that is aimed at adding value outside of IQumulate’s standard funding products.
“[IQView] pulls together experts from a variety of industries to assist our broker partners with their professional and personal development through online webinars,” said Gordon. “These webinars will be accredited with CPD/CIP (continuing professional development / certified insurance professionals) points, which are essential for our brokers under their learning and development plans for the level five financial services qualification.
“The formation of this programme shows our understanding and commitment to our partners in making quality content available to support their learning and development needs. This understanding helps us to grow strong and long-lasting relationships with our brokers.”
He highlighted: “The first session recorded was with Kevin Biggar, who has an incredible bio as an adventurer, author, and award-winning public speaker. Given the toll COVID is taking on mental health, Kevin was the perfect speaker to provide insights and examples on how to overcome our own personal challenges.”
Moving forward, the IQumulate executive believes they are well positioned to support the industry’s needs when it comes to premium funding.
“Insurance costs are expected to continue rising through the next 12 months,” stated Gordon, “and our product is here to help Kiwi businesses and households manage their cashflow, and ensure they can afford the right level of cover.”
