Beyond Participation to 100% Ownership
Go Beyond Participation
In the past ten years or so, almost all F&I product providers have offered the dealer some qualified participation in the underwriting profits that previously were completely owned by the provider. This has given rise to the notion that reinsurance is just another name for a profit participation program.
We disagree. Participation means “the act of taking part.”
Participation is quite different from what Portfolio offers its dealers. We do not own a share of the dealer’s ARC. We work for fully disclosed fees only, not a part of the profits. Portfolio dealers own 100% of the underwriting profits and investment income that is generated by their Affiliated Reinsurance Companies (ARCs).
To us, reinsurance means 100% ownership by the dealer, and only that.
The Myth of Shared Risk
Aftermarket protection products like VSCs, GAP, and ancillary products represent a mature industry that has roots in the 1970s. For this reason, the cost of claims is as well known as any other insurable risk in Property & Casualty actuarial data analysis. The premium dollars reserved to cover claims costs, underwriting fees, and administration, plus profit is also known, and built into the dealer’s cost of the product. By every reputable provider.
This is what professional risk management is all about.
Despite that many providers defend their participation program’s structure as protecting the dealer from excessive losses. They present their program as “sharing the risk,” and control the profits until the risk has fully expired on each contract. Yet they are knocking on every dealer’s door to get more of this “high-risk” business.
At Portfolio we provide our ARC owners decades of expertise in professional risk management for maximum profitability of the reinsurance company. Our long track record of success in this duty is what lays the foundation for the dealer’s 100% ownership of the ARC and all the profits it generates.
We believe that “sharing the risk,” and therefore the profits, is a myth perpetrated for the benefit of other providers’ unstated agendas.
We Have Learned the Business
We believe our proper structuring and expert management of the dealer’s reinsurance company reduces the risk to the dealer so that the profits build a personal wealth asset. This asset provides the ARC owner with significant financial independence.
Though we are not an insurance company, we have learned to do what any insurance company does to make itself profitable. That expertise is what we share with Portfolio ARC owners, and have been sharing since 1990.
And we have learned to do it for reasonable and fully disclosed fees only, not a share of the profits.
This makes Portfolio the most affordable way for the dealer to build wealth through owning a reinsurance company.
Contact us to evaluate your current participation program and to learn more of what Portfolio can do for your personal and business goals.