Tag: Finance & Insurance

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EFG Companies

EFG Announces Number One National Ranking

– Automotive News lists EFG Client, Bob Moore Auto Group, as leader of top 25 U.S. auto groups-

bob moore logoEFG Companies, the innovator behind the award-winning Hyundai Assurance program, was recognized today by Bob Moore Auto Group as the foundational reason for their Automotive News ranking as the national leader in F&I revenue per retail unit (PRU) among the top 125 U.S. dealership groups.

The auto group not only carries a full portfolio of EFG’s F&I products, but also relies on the innovator for strategic services, such as compliance; reinsurance and risk management; sales and F&I training; F&I development; talent recruitment; pay plan development; full claims administration; and, technology services such as e-contracting and remittance.

“We truly value our strategic partnership with EFG, which has enabled us to offer our customers valuable products that protect them from the costs of unexpected vehicle repairs, and helps preserve the value of their vehicle over time, “said Curtis Hayes, Chief Financial Officer, Bob Moore Auto Group.   “EFG’s objective, professional counsel has enabled us to evolve and strengthen our business processes with innovative solutions and products, and their engagement model is not replicable by any other product provider, in my opinion.”

EFG built its reputation on delivering products that provide valuable protection to the consumer, fostering greater customer loyalty while increasing income opportunities for the dealer.  The company continues to raise the bar on delivering value to their clients.  Earlier this year, EFG was recognized as the only product provider of size to AFIP certify its entire field team.  The company was also awarded the Blue Seal of Excellence by the National Institute of Automotive Service Excellence – again, the only product provider to gain this recognition.

“Our engagement with Bob Moore Auto Group has pushed EFG’s innovation, and inspired us to set very ambitious targets that have translated into providing even greater value to our clients across the board,” said John Stephens, Senior Vice President of EFG Dealer Services.  “Many product providers go into dealerships with the number one goal of selling product, and secondary goal of serving as a strategic partner.  Our philosophy and model is just the opposite.  If we are providing valuable council and business insights that affect our clients’ entire operation, then the product production level should take care of itself.  I can tell you from having served as a general manager and general sales manager for more than 15 years that EFG’s model delivers an extremely unique value proposition to the client.”

EFG has additionally developed several proprietary technology platforms in its quest to be the most effortless and efficient third-party administrator in the industry.  Working directly with their clients, they have developed proprietary contract automation; online cancellation quoting and cancelling; and, the EFG’s Parts Wizard that identifies the highest quality parts from suppliers across the nation at the lowest price in real-time.  Its client portal, EFG DRIVE, is set to launch in Q4 of this year.

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F&I

Underwriting and Its Impact on Your Business

Contributing Author: Cliff Eller, Executive Vice President, Product CommercializationWith the first quarter behind you, it’s time to evaluate your progress and plan for the rest of the year. As you re-evaluate dealership processes, it’s also a good idea to step back and look at your relationship with your product administrator. Are they providing products that enhance your credibility with consumers? Are their products structured with enough reserve to handle any volume of claims no matter the market conditions?

It’s important to answer the following questions:

  • Is your product provider backed by an A.M. Best “A” Rated, fully insured underwriter?
  • How long have they been with their current underwriter?
  • Who has backed them in the past?
  • Do they adequately price their products to manage the reserve to pay claims?
  • How is their customer service in their claims department?

When partnering with a product administrator, you want to be sure that their reserves are handled properly to ensure that any unpaid claims don’t reflect back on you. One of the easiest ways to determine whether a product administrator will benefit your business is to look at the relationship with their underwriter.

First, find out their A.M. Best Rating. The rating signifies the company’s financial strength and ability to meet its ongoing insurance policy and contract obligations. Simply put, if their underwriter is a reputable company that follows through on its obligations, it’s highly probable that your product administrator is too.

However, that credit rating alone cannot convey the strength of the relationship between the product administrator and the underwriter. If the administrator has a relatively new underwriter, it’s a good idea to look into their history with others. Do they hop from one to another? With whom have they done business in the past?

Looking at how long the company has been with their current underwriter or whether they flip from one to another can tell you about the company’s viability in the market. If they can’t maintain a long-term relationship, they are most likely mishandling their reserves and putting the underwriter at greater risk. Looking at the company’s history of underwriters will display a pattern. If they’ve only worked with strong underwriters, their products are probably handled properly. If they can only attract weak underwriters, they are most likely mishandling the structure and pricing of their products.

Another area to evaluate is their reserve structure. While inexpensive products are well and good, that low cost could negatively affect the funds put in reserve to pay claims. Find out how much income from each product sold goes towards paying claims. Ask how many claims are paid each year, and take a look at their Better Business Bureau rating. If the BBB is inundated with consumer complaints about unpaid claims, that could point to a reserve issue.

One way to determine whether the reserves are handled appropriately is to find out whether their underwriter’s actuaries assist in the process of pricing the products. The actuary’s primary role in this process is to protect their company from the negative impact of having too little money to pay claims. So, they would be the most stringent about making sure the reserves are appropriately priced to accommodate the associated claims exposure.  If they sign off on product pricing and structure, that’s a good indication that the reserves are set up correctly.

It is also important to find out how the product administrator takes seasonality or market changes into account. Does the company compile it’s data to determine both long and short-term trends to refine coverage and rates? For example, more claims are filed during winter for tire and wheel policies because of worse road conditions due to potholes. The key to managing this loss ratio is to plan ahead by taking this seasonal change into consideration when first presenting the price structure.

Lastly, look at their customer service in their claims department. How fast are incoming calls answered? How quickly do they process a request? How often are calls abandoned? These statistics paint a picture of the customer experience. If customers spend most of their time waiting for their call to be picked up or for their request to be processed, you can bet that they won’t buy an F&I product from you again. Even though their claim is handled by someone else, you are essentially the face of that product administrator and the consumer will always associate that negative experience with a product you sold them.

With over 36 years of innovating consumer protection products, EFG Companies knows how to structure F&I products that increase your profit and keep enough in reserve to handle whatever the market throws our way. That’s why we are the longest-standing relationship for more than 28 years with our AM Best, “A” Rated underwriter. Find out how our consumer protection solutions and go-to-market strategies will give you the edge you need to succeed in today’s market.

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EFG Companies F&I Featured

New Power x2 Product Doubles the Benefits of a Manufacturer’s Powertrain Warranty

-90 percent of consumers surveyed said they would seek out a dealership that offers it-

Power-x2-LogoEFG Companies, the innovator behind the award-winning Hyundai Assurance program, announced today the launch of Power x2, a powertrain protection vehicle service contract that doubles the benefit of the manufacturer’s powertrain warranty.  The new contract delivers a vital dealer tool, proven by independent research indicating that 90 percent of surveyed consumers say extended warranties impact their purchase.

According to a recent EFG survey conducted by a third-party research firm, 62 percent of consumers said the manufacturer warranty significantly affects what make and model of vehicle they consider purchasing.  New vehicles are exactly the same within a manufacturer brand from one dealer lot to the next, including MSRP and the manufacturer warranty. This underscores the need for dealers to give consumers a value-driven reason to come to their retail location versus the competitor down the street or across town. A recent statistic released by JD Power Automotive Internet Roundtable — that consumers now visit only 1.1 lots prior to purchasing a vehicle, down from three lots just five years ago — only amplifies the dealers’ need to deliver  increased value to consumers.

As consumers continue to keep their cars longer than historical norms, ongoing maintenance costs are more top-of-mind when making purchasing decisions.  According to EFG’s study, 48 percent of respondents expect to replace their cars every four to seven years, which could extend their ownership beyond 100k miles.  By doubling the benefits of the manufacturer’s warranty, dealerships have the opportunity to use this trend to their advantage. Seventy-two percent of the survey respondents stated that they would go out of their way to purchase a vehicle from a dealership that is less convenient to them if that dealership doubled the benefits of their manufacturer’s powertrain warranty as a complimentary offering.

“In this highly competitive market, we know that dealerships need showroom traffic now, whether online or at their physical location, not six months to a year from now,” said John Pappanastos, President and CEO of EFG Companies. “Power x2 provides dealerships an immediate means of capturing market share based on current consumer wants and needs by moving past the price game to a more value-based conversation that motivates car shoppers to a transaction.” Dealerships can also increase fee income by offering exclusionary coverage that wraps around Power x2 for a specified timeframe, which includes:

  • the suspension;
  • the fuel system;
  • the electrical system; and,
  • the cooling system, among others.

Power x2 gives dealers a valuable toolkit to address each customer’s specific need when it comes to taking care of their vehicle and protecting their pocketbook. EFG also acts as a very strong extension of the dealer’s customer service through its in-house claims administration that operates according to above-industry standard target SLAs.  This translates to enhanced customer retention and loyalty.

Contact EFG today for more information on this new product and how it can benefit your business.