Tag Archive | "Dealers Assurance Company"

Canada’s iA Financial Group Completes Acquisition of SouthwestRe, DAC

ALBUQUERQUE, N.M. and COLUMBUS, Ohio — iA Financial Group (iA) of Canada has finalized its acquisition of Southwest Reinsure Inc. (SouthwestRe) and its insurance arm, Dealers Assurance Co. (DAC), after receiving the necessary regulatory approvals. Both companies will now operate as fully owned subsidiaries of iA.

In September, iA announced it had signed an agreement to acquire SouthwestRe and DAC, with officials saying the purchase would allow the company to expand its footprint in the United States.

“With our solid track record in the extended warranty business in Canada together with the established presence of SouthwestRe [and DAC] in the U.S., we look forward to this new chapter in our U.S. expansion with great anticipation,” said iA American President Mike Stickney.

Founded in 1892, iA is one of the largest life and health insurance companies in Canada as well as one of the largest F&I providers for Canadian auto dealerships.

SouthwestRe was founded in 1985 as a third-party administrator and provider of reinsurance programs. DAC’s roots date back to 1935. It operates as a property and casualty insurance company with offices in Columbus, Ohio, and Dallas. The company primarily serves the automotive, consumer goods and related lending industries.

“Unlike many transactions in our industry, iA has a long-term view of this acquisition and the industry in general,” said Kristen Gruber, who has served as president of DAC since 2014. “With the resources and stability that iA brings to the table, we look forward to becoming one of the premier warranty insurers in the U.S.”

Eddie Eckert, president of SouthwestRe, added: “As you might imagine, this is an important moment for our entire organization. For the past 32 years, we have worked very hard to earn the patronage of each and every individual who has done business with SouthwestRe. Come what may, that will never change. If anything, we will work that much harder to win your business.”

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Borchardt Joins PALS Roster

LAS VEGAS – Kirk Borchardt, an attorney and leading expert on the regulatory, tax and corporate structural aspects of the service contract and ancillary products industries, has agreed to speak at the 2015 P&A Leadership Summit, organizers said Thursday. The event will be held Sept. 9–10 at Paris Las Vegas.

“Considering the breadth and depth of Kirk’s experience in this segment, we are honored to welcome him to the P&A Leadership Summit,” said David Gesualdo, show chair and publisher of F&I and Showroom and P&A magazines. “I encourage attendees to have questions at the ready.”

In his presentation, “Solving the Industry’s Conundrums, One Question at a Time,” Borchardt pledged to take on challenging and fluid topics that beguile F&I product providers and are made increasingly difficult by a hostile regulatory climate. Areas of focus will include AO limited warranties and dealer-owned warranty companies, and Borchardt plans to leave time for an extensive question-and-answer period.

Fellow P&A Leadership Summit presenter and longtime associate Kristen Gruber predicted that Borchardt would deliver a memorable address.

“You can count on Kirk Borchardt to fairly (and creatively) present outstanding issues and risks associated with each question,” said Gruber, who serves as president of Dealers Assurance Company (DAC). “His background and knowledge about our industry make him the perfect person to tackle complex questions in this type of forum.”

Registration is now open for the P&A Leadership Summit. Attendees who register by Aug. 7 will enjoy a $100 early-bird discount. More information, including additional speakers and travel, is available at the event’s website. To inquire about sponsorship or exhibition opportunities, contact David Gesualdo via email hidden; JavaScript is required or call 727-947-4027.

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Gruber to Lead Big-Data Panel at PALS

LAS VEGAS – Organizers of the 2015 P&A Leadership Summit have announced the addition of Kristen Gruber, president of Dealers Assurance Company (DAC), who will lead a panel discussion at the event, which will be held Sept. 9–10 at Paris Las Vegas.

“Kristen Gruber recognizes the proliferation and aggregation of data in the providers and administrators segment as an opportunity to change and improve the way we do business,” said David Gesualdo, show chair and publisher of F&I and Showroom and P&A magazines. “Our attendees and the industry at large should listen closely.”

Gruber’s panel will be comprised of industry professionals who are using technology to improve their understanding of historical loss data. They will describe the tools they use to quickly visualize and identify trends and loss drivers and explain how they improve underwriting and lead to better decision making.

“This is a must-attend session for anyone interested in getting real value from your data,” Gruber said. “Contract administration systems are a big investment for many administrators, and the return on this investment can be amplified by a company’s ability to extract meaning from the data captured.”

Registration is now open for the P&A Leadership Summit. Attendees who register by Aug. 7 will enjoy a $100 early-bird discount. More information, including additional speakers and travel, is available at the event’s website. To inquire about sponsorship or exhibition opportunities, contact David Gesualdo via email hidden; JavaScript is required or call 727-947-4027.

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An Interview with Jim Smith

AE Magazine sat down with Jim Smith, founder and chief executive officer of SouthwestRe, for an interview. Not only were Jim’s answers insightful as to the companies he runs, but they also gave us a snapshot of his personal life and how his career came to be. Take a look at what Jim had to say below.

Tell me a little bit about your company and its place in the industry?

SouthwestRe started in 1985 as a reinsurance company administrator. The reinsurance company (RIC) concept was just getting started in this industry. Regulatory changes created an opportunity for SouthwestRe to get into the vehicle service contract (VSC) business in 1987 and then we grew from there. We subsequently formed a Risk Retention Company (RRG) in 1989 (when they were the leading edge of insurance) and then had the opportunity to buy Dealers Assurance Company (DAC) in 2004 when the RRGs were going by the wayside. We are proud of the place we hold in this industry, as we are one of the few fully integrated organizations. What I mean with this comment is that we are a 1.) TPA, 2.) an A.M. Best A-rated insurance company, and 3.) a corporate manager for all of the various profit-sharing strategies.

Throughout the years, there were occasions when SouthwestRe played an important role in helping to guide the industry through some rather tumultuous times, as we and other companies sought to establish reinsurance as a legally viable program that would stand muster under intense IRS scrutiny. And along the line, our organization has grown by doing the right thing. We are now a multifaceted organization that can provide all (or any of the individual parts) of the insurance ingredients for a producer in our industry.

Are there any recent or future developments within your company that you would like to tell us about?

We recently changed the name of the ultimate holding company to Helios Financial Holdings Corporation (Helios). The name of the company has a slight esoteric background which, if anyone is interested I would love to share, but won’t tell the secret here. (Think of the translation of “sun” in both ancient Greek and Egyptian.)

There is another reason for the name change of the holding company. With DAC having just reached $50,000,000 of capital and surplus and a category VII status with A.M. Best, there is the opportunity for it to stand on its own. And it is much easier to stand on its own if the parent company’s name doesn’t infer that it is part of a single organization. DAC really has the ability and desire to do business with everyone in this industry (as long as there is a sound business plan).

SouthwestRe, on the other hand, also has the infrastructure to continue providing the most comprehensive profit-sharing strategies in this industry, as well as helping support DAC if necessary.

How did you personally get started? What caused you to choose this career path?

My educational background is as an accountant, where I got my BBA from Texas Tech. After college, I had job offers in two industries, oil and insurance. For personal reasons, I flipped the coin and went to work for an insurance company. After a couple of years of working very long hours, I knew I had to either study for the CPA exam or completely commit myself to the insurance industry, long hours and all. The reason is because of the unique nature of the insurance industry from both a regulatory and a conceptual basis. From what I had learned so far, I felt there was opportunity for me in this industry, which is completely different than any other industry.

In retrospect, I think it was a wise decision committing myself to the insurance industry, ultimately becoming CFO of an insurance company before leaving it and starting SouthwestRe. And from there, was able to purchase DAC and subsequently created Helios, which has over ten operating entities.

What are your interests outside of work?

My main interests are sports (unfortunately now just as a spectator) and reading, mainly fiction. My favorite authors are John D. McDonald, Patrick O’Brien and Dick Francis (just a coincidental English connection with the last two), and I enjoy reading all sorts of esoteric information on the Internet. Additionally, anyone who has known me for any length of time knows my fascination with the theory of the six degrees of separation – more later on this.

Tell us about your family and the role they have played in your success.

Women played a strong role in my upbringing as well as in my later business activities. I was raised by a strong-willed, single mother and an aunt; neither of whom took a back seat to any man. They not only helped shape my personality, but they also provided me with the educational background and characteristics to succeed, and respect the place women have in organizations. Today I am very happy to say that a lot of my success is attributable not only to my mother and aunt, but also the female colleagues that I have been fortunate enough to work with, who also don’t take a back seat to anyone.

The first was Jackie Fewell, who was arguably the first employee of SouthwestRe. She not only helped keep the place together as we were getting started, but later, with my assistance, started a successful Internet venture, Fat Cow Web Hosting, which became a middle tier web-hosting company. The important part is that when we sold Fat Cow, this gave me the down payment for the ultimate purchase of DAC.The other person is Kristen Gruber, who I have known for over 15 years and has helped us grow from afar, but recently joined us, becoming the president of DAC. She has become a tremendous asset for DAC and is another woman who has played a significant role in my success.

What are the biggest issues you see facing the industry today and in the future?

I have always maintained that the insurance industry is the most regulated industry in the US. And now, with the assimilation of the credit and banking industries into this industry it has become even more regulated. I believe that knowledge of the regulatory environment, as well as product knowledge is paramount to continued success today. We have been fortunate enough to embrace these concepts. But even though our knowledge helps us comply with the rules and understand the risks, more importantly it helps us take advantage of the opportunities that exist today and in the future. This applies to our ability to help our automobile dealer clients, our agent clients, as well as the administrator clients of DAC, and it allows each of them to achieve the greatest reward with the least risk.

Is there anything else you would like to add?

I mentioned the six degrees of separation earlier, and it is truly amazing how everything and everyone is interrelated in one form or another. Just like the Kevin Bacon game, it is easy to find parallels in this industry. It also makes you realize that you need to be mindful of how you treat people, not only in this industry, but life in general because everyone is connected.

An eerie case in point on the six degrees of separation concerns the two job offers I had when I decided to leave Dallas and go to work for an insurance company in Albuquerque. One offer was from an insurance company in Albuquerque and the other was a larger insurance company in Amarillo. The Amarillo job paid more and was with a bigger insurance company, while the Albuquerque job had a higher position but lower pay with a much smaller company. This time I didn’t flip a coin, but came to Albuquerque, which is one of the reasons I am where I am today.

My decision really hit home about five years ago when I interviewed a gentleman for a CFO position. After talking about companies he had worked for and where he had been, we realized that he took the job that I turned down in Amarillo. The scary thing is this company shut down about one year later when another public company bought them (and that could have been me out of work). He subsequently ended up with another insurance company and then THAT company ultimately shut down. Here he was, 20 years later applying for the CFO position because I didn’t take the bigger one that he ultimately got 20 years earlier.

So my advice is don’t be afraid to take chances and don’t always think that the seemingly most attractive route is the best route. Let your intuition be your guide as much as your brain. And remember, everything is connected, so treat everyone as you wish to be treated. Try to do things the right way and when trying to get ahead, don’t take shortcuts.

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A.M. Best Increases DAC’s Financial Size Category to Class VII

Columbus, OH– Dealers Assurance Company (DAC) is pleased to announce that A.M. Best Company has increased DAC’s Financial Size Category from VI to VII. Category VII designates companies whose adjusted policyholder surplus is between $50 million and $100 million. DAC surpassed $50 million in capital and policyholder surplus at the end of 2013.

Commenting on the Company’s new financial size category, Kristen Gruber, President of DAC, said, “This is a tremendous achievement. We are delighted that DAC has reached the Category VII designation. The increase in our financial size category reflects DAC’s continued financial stability, profitable management, and consistent growth.

“In 10 years, DAC has gone from $10 million to $50 million in capital and policyholder surplus,” Gruber said. “This puts DAC in a better competitive position than ever before, and provides us with the potential to target new markets and insure even larger clients. In addition, our net premium has also increased over this time, so DAC continues to retain its existing customer base while growing and serving new clients as well.”

On August 2, 2013, A.M. Best Company affirmed DAC’s Financial Strength Rating of A- (Excellent), which was the 28th straight year that DAC received this rating. DAC is licensed to transact insurance in 49 states and the District of Columbia.

Founded in 1899, A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. Policyholders refer to A.M. Best’s ratings and analysis as a means of assessing the financial strength and creditworthiness of risk-bearing entities and investment vehicles.

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