Construction sector SMEs and sole traders - cornerstones of many insurance brokers’ portfolios - are facing a perfect storm of economic headwinds and intensified ATO enforcement, with insolvency numbers surging to new highs. Figures from Arteva Funding reveal that these businesses account for a hefty slice of the nearly 15,000 Australian firms that collapsed in the past year alone. More striking: Arteva’s own lending data shows a staggering 300% spike in insolvency rates across its client base in just two years, up to June 2025.
For brokers, the crisis is more than a statistic — it’s a call to action. Premium funding, a familiar solution for spreading insurance costs, could be gaining new relevance as clients grapple with cash flow and credit constraints. Yet, as Daniel Gronert (pictured), CEO of Arteva Funding, points out, many brokers are missing a trick by not proactively positioning premium funding as a risk management tool.
“There is often a perception that access to finance is not something that their client may need, because they make an assumption that their client won't need it, that they've got available capital,” said Gronert.
It’s no surprise that many brokers hesitate to suggest premium funding to clients, often assuming business owners either don’t need the help or have enough capital on hand. Some worry that raising the topic might be seen as casting doubt on a client’s financial health. But, according to Gronert, brokers should reframe the conversation: positioning premium funding as a proactive risk management strategy, not a sign of trouble, but a smart way to support clients’ cash flow and resilience.
“Our view is that, as a risk advisor, it's in some ways possibly remiss of the broker not to consider their client’s cash flow challenges or potential cash flow challenges over the year ahead - just as you would any other risk that the broker may be providing insurance coverage for,” he said.
The CEO said giving a client the option to make that decision is taking the issue of financial risk off the table.
Framing premium funding as a risk management strategy helps brokers remove any stigma from the conversation. Gronert advises that the ideal moment to raise the option is early in the process - when the ability to spread insurance costs into manageable monthly payments can most influence a client’s decision on the right level of coverage.
“Where we see the highest take up of premium funding is where brokers simply ask the question, very early on in the process of arranging their insurance coverage, 'have you thought about how you're going to pay for your insurance this year?'” Gronert said.
He said this should happen as part of the early fact-finding process that goes with understanding where the business risks are.
“This gets their mind thinking about how they're going to pay you - because it might be that they aren't sure,” said Gronert. “They may have challenges in arranging access to funds or to they may have tied up capital elsewhere, or other commitments on the horizon that they need to utilize cash for."
He said that when the premium funding option is presented early by a broker, Arteva generally sees “exceptionally high take-up rates.”
Are you a broker? When a client is in financial trouble, what strategies do you suggest that might help them? Please tell us below
