Line of work 03
Profit Participation and Reinsurance for Dealers
Structures that let the store earn on the products it sells, not only on the commission booked the day the unit is delivered. The underwriting profit and the investment income on those contracts can belong to you rather than to somebody else.
You are already taking the risk. You may not be getting paid for it
Every protection product you sell carries underwriting profit. Premiums come in, claims go out, and whatever is left over belongs to whoever holds the risk. In most stores that is not the dealer. The store takes the commission at delivery and the rest goes to the provider.
That arrangement is the default, and it is rarely presented as a choice. It is a poor deal over ten years, because the store is the one influencing almost every variable that decides whether those contracts perform. You choose the products. You decide how they are presented. Your service department handles a large share of the work that turns into claims.
Put another way: the store already does the things that make a book profitable, and the profit goes elsewhere by default. Profit participation is the structure that changes that.
What We Offer
What a profit participation structure has to get right
These are not interchangeable, and the right answer depends on the size of the store, the mix, and how much risk the owner actually wants to hold.
Which structure fits
The options differ in how much risk transfers to you, how the income is treated, and how much administration comes with it. A structure that suits a twelve point group is a bad fit for a single store, and the reverse is also true.
How much risk you want
More participation means more upside and more exposure to a bad claims year. That is a decision about the owner's appetite, not a technical question with one correct answer.
What it does to the products you sell
Once the store has a stake in claims performance, the incentive to put a weak product on the menu disappears. This is the part that quietly improves everything else.
Getting out, and getting the money
How income comes out, on what schedule, and what happens if the store is sold. Worth understanding at the start rather than at the point of sale.
Our Process
How we work with your store
This is a long-horizon decision and it should be made with the numbers in front of you.
- We model it against your actual volume and mix, not an illustration
- The structure is chosen for the size and shape of your store
- It connects to the products on your menu, because claims performance is now your upside
- Administration and reporting are part of the conversation, not a surprise afterwards
- If participation does not suit your store, we will tell you that
Common Questions
Questions dealers ask
Is this only worth doing at scale?
No, though scale changes which structure fits. The volume question is really about whether your book is large enough for the claims experience to behave predictably. Below a certain size a single bad year swings the result more than most owners are comfortable with, and that is a conversation to have honestly before anything is set up.
What happens in a bad claims year?
You feel it, which is the other side of taking the upside. How much you feel it depends on the structure, and that is exactly why the structure is chosen deliberately rather than by default.
Does this change how we sell?
It should not change the presentation. It changes what you put on the menu, because a product with poor claims behavior is now costing you directly rather than costing your provider.
What happens if we sell the store?
That belongs in the structure from the beginning. The answer differs by structure, and an owner who expects to sell within a few years should weigh that before choosing one.
Find out what your book is worth
The assessment includes what your current products are producing and whether participation is worth modeling for a store your size.