Bexhill UK seeking banking licence to better compete in market

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It will also allow the firm to grow its lending book while continuing to provide brokers with an alternative

Premium Finance provider Bexhill UK has applied for a licence in a bid to become a bank in 2020.

The move will allow Bexhill UK to compete with other premium finance players by offering the most cost-effective method to brokers.

Ravi Takhar, co-founder and chief executive at Bexhill UK, told Insurance Times: “This will enable us to continue to promote our unique model, which helps insurance brokers set up their own premium finance business.”

The intention is to create a third player in the market that can compete.

Cost effective

Bexhill Insurance works with more than 100 brokers in the UK that run their own finance companies via its support.

Having been in the premium finance industry for more than 20 years, Takhar added: “They [other premium finance players] limit the choice effectively for brokers by their dominance in the market, so we have always tried to compete and offer an alternative, but we haven’t been able to do this as effectively as we have wanted to because our cost of debt and available liquidity was more expensive.

“What we are anticipating with the bank licence is that we will be able to access retail deposits, and therefore offer brokers very competitive rates in the future as well as the service we have always provided.”

Speaking about the process, Takhar said that the firm had to present its plan to the regulator, the PRA, as well as enhancing its board with senior bankers.

But it’s not the first time that Bexhill UK has applied for a licence, in July 2018 its parent company Orchard Funding Group PLC applied for a banking licence to allow it to provide an alternative premium finance service to more brokers.

Future

Takhar added: “The banking licence will enable us to grow in terms of our lending book, [as well as] be a real alternative in the market.

“We have always helped brokers to look at a more service-driven proposition; as we are a smaller business we have more of a hands-on and tailored approach to insurance brokers.”

The main challenge for premium finance providers during Covid-19, he said, is to continuing to provide uninterrupted service to its customers.