Premium Finance Market

Premium Finance Market Size

The global premium finance market size was valued at USD 49.5 billion in 2024 and is estimated to register a CAGR of 10.7% between 2025 and 2034. An increase in the price of insurance premiums is significantly impacting the growth of the market. In India, based on the LocalCircles survey published in January 2025, more than two-third of policyholders reported an increase in their insurance premiums by 50 to 200 percent in the preceding three years.

With the rising insurance premium cost of life, health, property, and commercial insurance policies due to factors such as inflation, increased risk exposure, and legislative mandates, payment in full becomes increasingly difficult for both individuals and businesses to manage. Through premium financing, businesses and individuals are better able to manage their cash flow by obtaining a loan to pay for insurance premiums while safeguarding critical coverage.

This financing option is particularly seen as a preferred option by commercial entities or individuals with a large net worth. These individuals often require substantial insurance protection but prefer investing their capital or preserving cash flow. With premium finance, policyholders can retain comprehensive insurance without selling or mortgaging assets or disturbing their financial strategies by turning large premium payments into smaller and manageable installments.

Effective management of cash flow is another significant reason why businesses seek out premium finance. Instead of locking up vital cash in paying insurance premiums, firms ensure liquidity by using funds from premium financing, which can then be directed towards critical operations, investments, or expansion. Companies with several insurance policies or those with a seasonal revenue cycle greatly benefit from this approach as it helps them manage insurance expenses with cash inflows, thus providing enhanced flexibility for financial management as well as planning.

Premium Finance Market Trends

• Wealthy high-net-worth individuals (HNWIs) are increasingly utilizing premium finance to pay for significant life insurance policies required for estate planning and wealth transfers. For these clients, it is preferable to maintain liquidity and leverage policy performance instead of bearing the costly upfront premiums.
  
• Brokers and lenders have begun to embrace the use of digital channels for servicing applications, approvals, and premium finance transactions. Automation, along with insurer API interfaces, enhances the customer journey while minimizing wait times.
  
• In April 2024, ePayPolicy and US Premium Finance entered into a partnership to redefine and modernize the process of insurance premium financing by introducing the Finance Connect feature. With this partnership, the company aims to simplify and streamline insurance premium financing for agencies, brokers, and insureds.
  
• Growing insurance penetration in the Asia-Pacific and Latin America regions is creating new opportunities for premium finance. There is an increasing availability of insurance amongst individuals and SMEs, which makes financing crucial to manage its cost.
  
• Companies in the construction, healthcare, and transportation sectors are now utilizing premium finance to manage the increasing costs of insurance policies. This approach assists with maintaining coverage while aiding operational cash flow.
  

Premium Finance Market Analysis

Based on provider, the premium finance market is segmented into banks, NBFCs, and others. In 2024, the banks segment was valued at around USD 25 billion and held a market share of over 50%.

• Banks have a well-established client base of individuals and businesses which provides them with a seamless marketing of sophisticated premium finance products. Their reputation as dependable institutions enhance borrowers’ comfort levels.
  
• A large number of financial institutions provide advanced financing services bundled with other services such as wealth management, insurance brokerage, and estate planning. These services provide enhanced convenience and increase supplementary marketing, which improves its adoption rates.
  
• The evaluation and approval of premium finance applications is more efficient and effective at banks due to strict credit risk frameworks and risk assessment models in action. Their conservative approach also aligns well with regulatory requirements in this space.
  
• Large-scale banks are multi-regional which allows them to swiftly scale premium finance services, giving them a competitive edge over smaller regional finance providers with limited coverage.
  

Based on the end use, the premium finance market is segmented as commercial and individual. The commercial segment dominated in 2024 with a market share of around 68%.

• Premium financing is helping companies transform the irregular and large chunk of insurance payments into smoother, fixed monthly instalments. This is especially useful for companies with seasonal or fluctuating revenue as it helps them in budgeting and financial planning.
  
• Insurance policies for businesses usually include property, liability, workers' compensation, and specialized cyber policies, making them multi-faceted and of high value. The cybersecurity insurance market was valued at USD 16.4 billion in 2023 and is projected to expand at a compound annual growth rate of 20.9%, reaching USD 88.8 billion by 2032. These factors significantly increase the overall cost of insurance, making premium financing an attractive option and way to reduce immediate cash flow pressure.
  
• Larger and medium sized companies usually hire CFO or a risk manager who understands and thus employs this insurance type due to the financial advantages of premium financing. This understanding helps in managing insurance more efficiently and contributes to a higher adoption rate in the commercial sector.
  

Based on interest rate, the premium finance market is segmented as fixed interest rate and floating interest rate. The fixed interest rate segment led the market in 2024.

• Fixed interest rates allow borrowers to have fixed and consistent monthly payments throughout the duration of the loan. This consistency is beneficial for both people and businesses who are managing their finances under strict short-and-long-term budgets.
  
• Life insurance policies often come with multi-year premium financing. These long durations are well suited with fixed rates because they help lessen the borrower’s exposure to long-term interest rate risks. Additionally, they help in activities such as estate planning, which is usually preferred by HNWIs.
  
• The provision of fixed-rate financing simplifies budgeting not only for individual clients but also for commercial ones. This facilitates the incorporation of premium finance into more comprehensive financial, tax, and cash flow plans.
  

Based on financing term, the premium finance market is segmented as short term, medium term, and long term. The short term segment led the market in 2024.

• Short-term premium finance allows policyholders to preserve liquidity without being tied to long-term obligations. It’s ideal for managing seasonal or cyclical cash flows, especially in small and mid-sized enterprises.
  
• Most insurance policies, especially non-life (e.g., auto, property, liability), are renewed annually. Short-term financing, typically under 12 months, meets this cycle, making it a practical and widely adopted solution.
  
• Short-term loans reduce the credit risk for lenders and repayment risk for borrowers. Thus, this shorter commitment period also increases borrower confidence and simplifies underwriting.
  

North America dominated the global premium finance market with a major share of over 30% and the U.S. led the market in the region and was valued at around USD 11 billion in 2024.

• The U.S. has the world's most evolved insurance markets and has widespread coverage in both life and non-life sectors. Statista stated that in the U.S. life insurance adoption rate was approximately 50% in 2022, 52% in 2023, and 51% in 2024. This high demand and awareness create a strong demand for financing solutions, especially for large premiums associated with commercial and high-net-worth individual policies due to high insurance penetration.
  
• The U.S. has the highest population of HNWIs in the world. They frequently use premium financing to plan estates, transfer wealth, and optimize taxes. These clients tend to strategically finance life insurance policies worth hundreds of millions of dollars, thus leading to its demand.
  
• Fintech and specialty finance companies from the US are constantly creating innovations with quick loan servicing and flexible lending models through digitized frameworks. This easy access along with improved functionality has drawn more users to the premium finance sector.
  
• The evolution of the U.S. financial system is one of the most advanced in the world, with its banks and other financial intermediaries providing a full suite of premium finance products. This access, along with a positive brand image of financial institutions among consumers, enables the adoption of widespread premium financing.
  

The growth forecast for the premium finance market in China from 2025 to 2034 is highly encouraging.

• The insurance industry in China has observed a significant growth in last few years, which is strongly supported by government, and factors including rising risk awareness, and growing middle-class population contributing to its demand. As more people and businesses become aware of and by insurance, the demand for premium financing solutions to manage rising costs is expected to increase.
  
• China has seen a substantial growth in high-net-worth individuals who seek look forward to financial and estate planning tools. Statista stated that in 2021, the number of high-net-worth individuals (HNWIs) in China amounted to over nine million. The number of HNWIs in the country was projected to increase significantly, reaching more than 17 million by 2026. Premium financing is increasingly used by these clients to fund large life insurance policies for wealth transfer and tax efficiency without tying up liquidity.
  
• The Chinese government has encouraged life insurance and long-term financial products as part of national financial planning initiatives. This supportive environment has helped insurers and financial institutions offer structured premium finance products to a growing client base.
  

Germany is expected to show remarkable and promising development in the premium finance market from 2025-2034.

• Germany has one of the most advanced insurance markets in Europe, with a well-established life and non-life insurance section. The culture surrounding long-term planning and financial protection ensures a steady demand for both insurance and, subsequently, premium financing services.
  
• The financial regulations in Germany promote clear and safe lending practices, which reinforces trust in premium finance products. Regulatory supervision makes certain that providers and borrowers are safeguarded, thereby strengthening confidence in the market.
  
• Germany has a well-developed banking system which offers various financial products such as premium finance. Credit institutions as well as other specialized financial service providers partnerships with insurance companies to offer tailored financing options for clients and companies.
  

The premium finance market in Mexico is expected to experience significant and promising growth from 2025 to 2034.

• Mexico's insurance industry is developing at a steady pace due to rising awareness of financial safeguarding as well as policies aiming at encouraging the growth of insurance industry in the country. With the expansion of premium volume, financing becomes a viable option for individuals and companies facing increasing policy costs.
  
• The Mexican economy has developed and maintains cordial financial relations with the U. S., which impacts its insurance and lending markets. Insurance and finance providers based in the U.S. either have a presence in Mexico or collaborate with local companies, which is beneficial since they import well-established premium finance models into the region.
  

Premium Finance Market Share

Top 7 companies leading the premium finance industry in 2024 were IPFS Corporation, First Insurance Funding, Truist Insurance Holdings, JP Morgan Chase and Co., Lincoln National Corporation, Byline Bank, and Valley National Bancorp. Together, they held around 20% of the market share.

• IPFS has been known as one of the major companies in the premium finance market in North America since a few decades. With cutting-edge technology and a sophisticated digital ecosystem, its services insurance brokers and agencies through a wide spanning distribution network.
  
• First Insurance Funding is a commercial insurer that provides a wide range of premium financing solutions for both personal and commercial insurance lines. It has a large market share owing to its extensive customer base which stems from its long-standing relationships with brokers and insurers along with its strong customer service.
  
• Truist Insurance Holdings is a subsidiary of one of the largest financial service firms in the U.S., Truist Financial Corporation, which provides the company with strong market reach and financial backing. Its aggressive acquisition strategy, along with its integration of premium finance services, helps the company compete as a powerful player in the sector.
  
• JPMorgan’s strong presence in the financial services industry helps the company offer premium finance services as part of its integrated suite of wealth and risk management services. Its strong capital position, along with confidence and support from corporate and high-net-worth clients, helps the company hold its tier-one investment banking position in the market.
  
• Lincoln National (Lincoln Financial Group) is one of the prominent players in the life insurance sector where premium financing is widely utilized for estate and wealth planning. Their strong connections with financial planners and wealthy individuals support their presence in the area of premium finance.
  

Premium Finance Market Companies

Major players operating in the premium finance industry include:

• AFCO Credit
• Agile Premium Finance
• ARI Financial Group
• Byline Bank
• First Insurance Funding (Wintrust)
• IPFS
• JP Morgan
• Lincoln National
• Truist Insurance Holdings
• Valley National Bancorp
  
• The segment comprises large corporations which consist of banks, regional lenders, specialized premium finance companies, and non-bank financial institutions. While still maintaining some level of fragmentation, consolidation is on the rise as larger players buy out niche providers to scale up and enhance their capabilities.
  
• Banks, due to their cost-effective capital, extensive and deep distribution channels, and existing contacts with insured clientele continue to retain a significant market share. Nevertheless, fintechs and NBFCs are rapidly expanding and gaining market share. This is mainly due to their quicker service delivery, full digital onboarding capabilities, greater flexibility in service provision, and proactive servicing of small business and developing economies.
  
• Companies that are adopting to advanced digital ecosystems for broker integration, servicing, and loan origination are gaining competitiveness. In a dynamic environment of automated systems, instantaneous approvals, and self-service customer portals are becoming basic requirements and a point of service differentiation and competition.
  

Premium Finance Industry News

• In April 2025, P1 Finance with ePayPolicy launched Finance Connect, a feature that integrates premium financing seamlessly in online payment gateway for insurance agencies and their clients. With Finance Connect, insured customers can complete premium financing registration during online payment, which is similar to the Buy Now, Pay Later model. This reduces the time-consuming communication process and accelerates payment and policy binding techniques.
  
• In March 2025, Gracie Point Holdings, a significant player in life insurance premium finance segment announced the launch of GP Affluent Markets. It is an independent company dedicated to offering tailored leveraged life insurance payment strategies to wealthy individuals globally. The announcement was made in 2025 marking a notable addition to Gracie Point’s offerings for the global high-net-worth population.
  
• In September 2024, Applied Systems integrated Applied Pay, its AMS-native payments solution, with the top three premium finance companies-AFCO Direct, FIRST Insurance Funding, and Imperial PFS, enabling progressive, insured-led premium financing at online checkout. The solution is deeply embedded in the Applied Epic, Applied CSR24, and EZLynx Client Center, which improved the auto-application of payment credit transparently and reduces agent-perceived manual reconciliation errors.
  
• In June 2024, Finsall, an insurtech startup from Bengaluru focusing on insurance premium financing, noted that it has secured roughly USD 1.7 to 1.8 million in bridge funding from Unicorn India Ventures and Seafund, with other institutional investors joining the round as well. The firm intends to use the capital to set up a non-banking financial company (NBFC) to enhance its lending activities in the insurance premium financing domain.
  

The premium finance market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue ($Bn) from 2021 to 2034, for the following segments:

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Market, By Type

• Life insurance
• Non-life insurance

Market, By Interest Rate

• Fixed
• Floating

Market, By Provider

• Banks
• NBFC
• Others

Market, By End Use

• Commercial
• Individual

Market, By Financing Term

• Short term (less than 12 months)
• Medium term (1-3 years)
• Long term (More than 3 years)

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Southeast Asia 
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • UAE
  • South Africa
  • Saudi Arabia