PremFina’s chief executive reveals how its new Finance as a Service app aims to help customers ’consume insurance that fits their needs’
Biba 2021: Premium finance provider PremFina launched a new “Netflix-like” insurance finance app yesterday (13 May 2021) at Biba’s 2021 conference.
The insurance Finance as a Service (iFaaS) app aims to sell finance for insurance through an ongoing subscription or on-demand – this can be arranged for weekly or monthly periods instead of the traditional annual basis. The app is available on iOS and android devices, as well as via PremFina’s website.
Bundeep Rangar, chief executive of PremFina, told online delegates that the app caters to customers who wish to buy insurance that is mobile, flexible and on-demand – like “a Netflix subscription”.
He said: “The pandemic has brought forward what we were planning to do in a two-year period into one year. We are all used to Netflix or Spotify channels and turning things ’on and off’ on-demand.
“More and more countries that have a digital offering, whether it’s their products or services or rendering, will find appeal in flexible finance options that are both customer empowering and endearing. And it’s the millennial generation that we are catering to.
“Insurance is not bought as a utility – it’s bought as a fixed annual premium and with the way the world is going, people want to feel more empowered, more in control and turn things on and off as and when they need them, like a utility. They want to consume insurance that fits their needs.”
He gave the example of a car spending most of its time being parked in the garage.
This announcement follows the Covid-19 pandemic lockdown seeing customers become more heavily reliant on digital technologies, as social distancing was imposed to mitigate the spread of the disease.
Bridging the gap
Introducing the idea of iFaaS, Rangar asked Siri for a car insurance quote.
Following this, on a video call with two of his colleagues – Klaudia Gorczyca, director of international business, and Nij Saha, chief technology officer, Rangar discussed the extent to which digital channels have been internalised, with three out of five millennials now expecting insurance purchases to be made through subscriptions using a mobile phone.
PremFina claims that iFaaS bridges the gap between current market practices and the growing demand for this type of insurance by connecting two disparate worlds. It defines these worlds as:
- The growing market for flexible, on-demand insurance that is paid daily, weekly, monthly, per mile or per usage.
- Existing insurance systems, which are inflexible and calculate risk annually.
Rangar believes that iFaaS is the “future of financing”.
When asked why iFaaS was created, he said: “What we found was there was a disconnect between two worlds: where premiums have traditionally been calculated on an annual basis and a surging demand in the market for premiums to be offered on a variable basis, whereby customers could buy insurance per minute for renting [a] drone, for example, or per mile if it is a car.
“Looking at the demand on one side and legacy systems on the other hand, it led us to believe that there was a need in the market for something that bridged that gap.
” Combine that with the growth of mobility and the rendering of things through a mobile phone – millennials consuming services that are in a service subscription model.”
-By Clare Ruel