Should You Switch Reinsurance Providers?
Switching because another provider promises a lower admin fee or takes you to a nicer dinner is not a strategy. Start with an audit.
Maybe.
But switching because another provider promises a lower admin fee or takes you to a nicer dinner is not a strategy.
Start with an audit.
Ask Why You Are Considering Leaving
- Are fees too high?
- Are claims poorly managed?
- Are loss ratios deteriorating?
- Are investments underperforming?
- Is reporting inadequate?
- Is F&I support weak?
- Is the carrier weak?
- Are products uncompetitive?
- Is technology outdated?
- Does the provider fail to communicate?
- Does your representative actually understand reinsurance?
Compare Complete Economics
Provider A charges $125 per contract. Provider B charges $175. Provider A appears cheaper.
But suppose Provider B helps the dealership materially improve F&I penetration, produces stronger underwriting results and provides better investment management.
You need the numbers.
Understand the Exit Before Switching
Ask:
- What happens to the old book?
- Does it remain in runoff?
- What fees continue?
- Can investments move?
- Who administers existing claims?
- Are there termination charges?
- What happens to existing reserves?
- Can the new provider assume any responsibilities?
Don't Confuse the Agent With the Structure
A dealer may have a good reinsurance structure and a bad advisor. Or a good advisor and a bad structure.
Determine what is actually broken before replacing everything.
The Bottom Line
Do not switch because somebody promises something better.
Switch when a detailed economic and operational analysis demonstrates that another arrangement is likely to better serve the dealership's long-term interests.
When was the last time someone independently reviewed your reinsurance program?
Confidential. No obligation. There is no charge for the initial assessment. You may discover an opportunity, a problem, or that your program is exactly where it should be. But you’ll know.