As an actuarial consulting firm, we spend a lot of time deriving the specific cost for F&I products, both from an overall perspective and down to the granular level. For example, we develop models which inform you that the cost of a wrap service contract for a Hyundai Elantra with 30,000 miles and 2.5 years … Read More »

While publicly available data is not available for GAP writers, it is clear of that 2011 will go down as a profitable year for GAP Insurance. This is due to two factors: the lower leverage permitted by the credit markets and the high value of used cars. How does GAP work? Why do these factors … Read More »

Recently I had the pleasure of moderating a session on best practices for carrier and administrator relations at the VSCAC conference in Las Vegas with representatives from both leading carriers and administrators. Before discussing the best practices of maintaining a fruitful relationship between these parties, let’s briefly review the structure of the industry. An administrator … Read More »

Vehicle service contracts have traditionally been sold as a single pay product purchased at the time of vehicle purchase. While the typical retail charge for the vehicle service contract (VSC) can be in the thousands of dollars, the availability of the vehicle finance contract provides a ready source of funds to pay the full cost. … Read More »

Gary Fagg, a consulting actuary with CreditRe and one of P&A Magazine’s Actuarial channel contributors recently approached P&A to review some online GAP protection material that he will be providing AFIP for their certification program for F&I professionals. His experience in the actuary, accounting, risk management, and risk transfer solutions related to vehicle protection products, … Read More »

A trade-in guarantee program, when first viewed, may look like a lease-end, keep-the-vehicle value program for purchased vehicles. The basic promise is simple enough: an obligor promises the vehicle buyer a minimum resale value if the vehicle buyer replaces the vehicle during a specified replacement time window. Trade-in guarantee programs, however, are marketing programs. In … Read More »