How Premium Finance Unlocks Value for HCV Clients

Premium finance offers a number of significant benefits to brokers and their heavy commercial vehicle (HCV) clients amidst the rising challenges in South Africa’s fleet and logistics sector. That’s according to Sachin Govender, managing director of Fulcrum Premium Finance.

HCV Nightmare

The risks associated with owning and operating trucks in South Africa and neighbouring nations are formidable, with an alarming increase in truck hijackings and civil unrest-related incidents. Govender says these risks have led to skyrocketing insurance premiums, placing additional financial burdens on fleet and logistics enterprises. “According to recent crime statistics, 1,996 truck hijackings were reported in 2023, nearly double the number from the previous year. This environment has escalated financial strains on fleet operators, compelling them to seek cost-effective insurance solutions to protect their investments,” he notes.

From Broker to Strategic Finance Risk Adviser

Govender emphasises the evolving role of brokers in today’s landscape. He highlights the fact that by integrating premium finance into their service offerings, brokers can enhance client retention. They can also attract new businesses that are transitioning from merely arranging coverage to being providers of strategic financing solutions aligned with clients’ operational and financial goals.

Benefits for HCV and Fleet Owners

“Premium finance offers several advantages to HCV and fleet owners: it enables them to safeguard their working capital, spread out insurance premium expenses, preserve credit lines, access input VAT upfront, and streamline the financing process without additional collateral requirements. This financial flexibility is crucial for businesses operating sustainably and maximising growth,” says Govender. “As the industry progresses, premium finance is becoming crucial for fostering long-term, trust-based relationships with clients and driving the overall success of brokers and their business clients,” he emphasises.