Archive | Actuary

Trade-In Value Guarantee Opens a New Marketing Approach for Lenders, Dealers, and Manufacturers

Trade-In Value Guarantee Opens a New Marketing Approach for Lenders, Dealers, and Manufacturers

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 »

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Hyundai’s New Trade-In Value Guarantee

Hyundai’s New Trade-In Value Guarantee

Hyundai recently announced an innovative program: a trade-in value program which guarantees the value of the customer’s car. Here is how the program basically works: Buy a new Hyundai after May 1, 2011 Perform all recommended service at a Hyundai dealer Between 24 and 48 months, trade-in your vehicle for a new Hyundai The value … Read More »

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Considerations When Designing New Products

Considerations When Designing New Products

Working in the F&I industry stays interesting because of the great products that our industry continues to develop to meet the needs of the public. In developing a new product, there are, of course, many issues regarding policy language, pricing, marketing, systems, etc. We want to focus on some general considerations when developing a product … Read More »

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Trade-In Value: Is a Protection Policy the Answer?

Trade-In Value: Is a Protection Policy the Answer?

The Age-Old Concern Many thoughts go through the mind of the potential vehicle buyer. Purchase criteria focus on the vehicle’s benefits and costs during the period of ownership, but the vehicle’s trade-in value often makes an appearance in a buyer’s list of top 10 criteria. Most buyers have a repurchase horizon of four to seven years, and … Read More »

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LLPW Products: Good Idea for VSC Providers?

LLPW Products: Good Idea for VSC Providers?

Gary Fagg’s article in the August 2010 issue of P&A provided a wealth of information about the LLPW product. His article begs us to ask: “Why aren’t more VSC companies offering the LLPW product?” From an actuarial standpoint, the main problem is risk management: When does the LLPW insurer know that the policy has earned … Read More »

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GAP: Is there Hidden Equity in the Unearned Premium Reserve?

GAP: Is there Hidden Equity in the Unearned Premium Reserve?

This article explores a little-discussed issue for writers of GAP policies: are we earning the premium correctly? Earned premium for most insurance policies is calculated evenly over the term of the policy. For example, an auto insurance policy for one year will recognize 1/12th of the premium each month for the entire year the policy … Read More »

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