Inflation and Reinsurance: Understand Economic Trends to Grow Dealership Profit
David DeCredico warns dealers that rising repair costs — including parts as well as labor — will affect reinsurance profits. The senior vice president of reinsurance for APCO Holdings offers a dealership checklist in an EasyCare-sponsored analysis for Automotive News.
First and foremost, DeCredico urges dealers to check in with their reinsurance providers and start tracking key trends now to avoid being caught off-guard in their next cession meeting.
“An area that has not received as much attention is the strain that inflationary pressure is having on the profitability of dealers’ wealth-building and reinsurance programs — programs that allow dealers to participate in the underwriting profits on vehicle service contracts and other products sold at their dealership,” DeCredico writes. “Before things go too far afield, dealers should stop and consider some key issues to safeguard the success of these programs.”
