Evolution, Inc. since 1979
P&C Premium Finance vs Other Bank Lending
Key Performance Indicators (KPI)
| KPI / Metric | P&C Premium Finance | C&I | CRE | Business LOC | Auto Loans | Mortgages | HELOC |
|---|---|---|---|---|---|---|---|
| Loan Term | 6–12 mo | 1–5 yrs | 5–25 yrs | 1–3 yrs (rev) | 2–7 yrs | 15–30 yrs | 5–10 yrs (rev) |
| Typical APR | 16–24% | 5–12% | 4–9% | 6–12% | 4–9% | 3–7% | 6–10% |
| NIM | 5–9% | 2.5–4.5% | 1.75–3.5% | 2.5–4.5% | 3–5% | 1.5–3% | 2.5–4% |
| ROA | 3–5% | 1–1.8% | 0.8–1.5% | 1.2–2% | 1.5–2.5% | 0.5–1.2% | 1–1.8% |
| RAROC | 20–30% | 8–15% | 6–12% | 8–14% | 10–18% | 4–8% | 7–12% |
| RAROROC | 1.8x–3x | 1.2x–1.8x | 1.0x–1.5x | 1.2x–1.7x | 1.5x–2.2x | 0.8x–1.3x | 1.1x–1.6x |
| Default Rate | <0.25% | 0.75–3.5% | 0.25–1.5% | 1.5–4.5% | 0.5–2% | 0.5–3% | 1–3% |
| Recovery Rate | 90–100% | 40–80% | 60–90% | 40–70% | 50–85% | 70–95% | 40–80% |
| Collateral Type | Insurance Policy | Biz Assets | Real Property | A/R, PG | Vehicle | Home | Real Estate (junior lien) |
| Securitization Viability | Yes | Rare | Yes | Rare | Yes (ABS) | Yes (RMBS) | Yes |
| Product Standardization | High | Medium | Medium | Medium | High | High | Medium |
| Capital Efficiency | High | Medium | Low | Medium | High | Low | Medium |
| Secondary Market Appetite | Growing | Niche | Strong | High | Very High | High | Moderate |
| Fee Income Potential | High | Medium | Medium | Low–Med | Medium | Low | Low–Med |
| Operational Lift | Low | Medium | High | Medium | Medium | Medium–High | Medium |
| Liquidity Risk | Very Low | Medium | High | Medium | Low | Low | Medium |
| Cross-Sell Opportunity | High (with relationship control) | High | High | Moderate | Moderate | Moderate | High |
| Scalability | Moderate | High | High | High | High | High | Moderate |
*Portions of this page were created with the assistance of artificial intelligence. While we strive for accuracy, please verify critical information through additional trusted sources.