The '7 Bs' of Reinsurance for 2022 - AutoSuccessOnline
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The ‘7 Bs’ of Reinsurance for 2022

While you’re talking to your product provider, find out if they offer compliance training and get your F&I department tuned up for the new year.

Mark Barnes is the Senior Vice President of Sales & Revenue for Portfolio

It’s time to make sure your reinsurance company — and everything that affects its profitability — is equipped to handle another year of uncertainty. 

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We all know the ABCs of sales: Always Be Closing. But, a new year offers an opportunity to review the seven Bs that will drive the performance of your participation programs in 2022. 

1. Be informed

As of this writing, the federal tax situation affecting our business has not changed for 2022. As all things political are constantly in motion, you need to be aware of anything that impacts your dealership and your reinsurance company’s future. 

Your provider should be proactive in offering regulatory updates and timely guidance. If the tax landscape is altered significantly this year, invite your CPA to your next quarterly meeting. Personal, corporate and capital gains tax rates should be at the top of your watchlist. Scan the trade magazines and keep up with the NADA’s progress in protecting your business. 

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2. Be aware

Have you created the best buying experience for your customers? Make sure your F&I office is set up to sell the products you want in the reinsurance company you own. Stand at the front door and look across the showroom. Walk down to the customer lounge and service department. 

You will notice things others miss because you built it into what it is today. Instill that pride in everyone who works for you. 

3. Be smart

The products you selected to build your reinsurance company must remain relevant, profitable and a good value for your buyers. Compare penetration rates to premiums and claims. A high-premium product that generates an 80%-plus loss ratio may negate its own value and divert customer dollars from stronger products. 

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You need to offer all products to every customer. However, it’s smart to periodically review pricing to make sure they are in alignment with your overall standards. 

4. Be involved

Great leaders bring their vision to everyone in the company. Employees are motivated when they see the boss on the floor, working with managers and encouraging the sales force. 

Walk the lot with a salesperson and ask questions. What do they like about working there? What kinds of questions are customers asking these days? If your office isn’t close to the action, make it a point to spend time with your managers and meet customers in sales and service. 

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5. Be steadfast

Know your reinsurance goals and stick to the plans you made to reach them. Discuss them with your provider and make sure your company is still on track. 

You’ve not only survived the past two years of challenges, you’ve grown. Look for the opportunities when all others see is chaos. You’re on a long-term mission toward success. 

6. Be prepared

Follow the Boy Scout motto by taking stock of your resources and making note of potential threats. Anticipate your needs. Meet with your reinsurance provider and find out what your loan or surplus availability is — and what it will take to finalize a transaction. What is shown on your reports is not always the amount you can get when they include unexpected deductions. It should make sense to you. 

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While you’re talking to your provider, find out if they offer compliance training and get your F&I department tuned up for the new year. Being prepared means doing everything possible to protect your dealership. 

7. Be adaptable

If the last two years have taught us anything, it’s that we need to be flexible and willing to modify our process to meet unexpected hurdles. 

Any developments that can directly or indirectly affect your reinsurance company may require some big decisions about your products and program. And if your provider cannot adapt to changes you need to make, you have an obligation to your family and business partners to find one that can. 

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Bonus: Be kind

You’ve been through a lot recently. Between COVID, the chip shortage, inventory challenges and now rising inflation, everyone is asking “what’s next?” 

You are the stable force in many people’s lives. You can control the narrative for your dealership. Right now, customers are confused, frustrated and worried about the future. So just try giving them a little kindness. They will remember. And they will be back.

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