How growing Automotive Aftermarket expands producers’ opportunities to grow their own book

How growing Automotive Aftermarket expands producers’ opportunities to grow their own book

 

Case study: how Arrowhead’s efforts in growing Automotive Aftermarket helps producers grow

 

  1. One way Arrowhead’s innovations have helped us grow over the years is by “lifting out” programs from carriers, adding them under our management wing. Read the case study of Automotive Aftermarket’s lift-out and how the program has grown.
  2. Formerly a program by Universal Underwriters, Zurich purchased the program; 30 years later, turned the marketing, underwriting and servicing over to Arrowhead.
  3. View the multiple enhancements we’ve added to the program, from easy online rate/quote/bind to employee recruitment services to pass along to customers.

When Arrowhead took up Zurich’s challenge of growing Automotive Aftermarket, assuming management of their program in 2012, we began looking for ways to offer a wider range of market opportunities for our producers. Over the years our executive team had noted carrier books of business that were underappreciated but would flourish with a commitment to service.

They saw that too often, a carrier will abandon a book with a bright future because it loses money on the expense side, even though loss experience has been positive and the policies themselves are profitable. This is often because the carrier lacks the systems and bandwidth to service those customers efficiently and cost-effectively.

Faced with this dilemma, a carrier usually opts to sell the book or run it off. But there’s another option that allows the carrier to keep the book it has worked hard to build and grow: transfer servicing to a specialist that’s built to do it at a fraction of the cost. The carrier maintains its position as the source of capital and paper and enters into a partnership with a Program Administrator that has access to more agents, the ability to deliver more customers than imagined and the capability to service those customers throughout the life of the policy.

 

The challenge of growing Automotive Aftermarket

“Automotive Aftermarket is a huge segment, encompassing every business that touches your car after it rolls off the lot. Think of auto parts stores, mechanics and body shops,” says Adam Johnson, Automotive Aftermarket’s profit center leader. Formerly known as Universal Underwriters Group, the agency was purchased by Zurich in 1981, who began offering insurance for automotive aftermarket business in 1992. Twenty years later, Zurich began looking for a Program Administrator to manage the book. Although there’s unlimited growth potential for a carrier with the right appetite, large multinational Zurich had other priorities, investing in other lines of business.

Related: Top reasons to add Auto Aftermarket Express Package to your producer portfolio

 

The solution to growing Automotive Aftermarket? Lift out.

Zurich transferred operations driving the majority of the expenses to Arrowhead, including Operations, Distribution, Premium Accounting, Customer Service, Underwriting and Marketing. Zurich employees in these roles transitioned to the Arrowhead team. Automotive Aftermarket products and services were refreshed, updated and automated, including integration of billing, collections and customer service, into Arrowhead’s Centers of Excellence.

“Billing, collections and customer service were centralized at Zurich; the teams that moved to Arrowhead were sales and underwriting,” says Lisa Stahl, chief operating officer of Commercial Division. “Sales and service are our bread and butter. Our Centers of Excellence took on policy servicing seamlessly.”

 

Arrowhead brings innovation to grow Aftermarket

“Arrowhead is unique in that we can ‘lift out’ the part of the portfolio that’s costing the carrier and turn it into a program,” says Stahl. “The carrier pays us a percentage of the premium and the majority of its expenses disappear.”

She added, “Through technology and automation, Arrowhead is able to deliver better service level standards to carriers like Zurich, which improves retention and provides a runway for growth. Agents and customers love the service commitment and bring us more business, plus Zurich can grow its footprint via Arrowhead agents.”

Related: Aftermarket loss prevention best practices

 

How Arrowhead has grown Automotive Aftermarket

 In the past eight years since we assumed program administration and focused on growing Automotive Aftermarket, we’ve enacted a number of innovations to help our producers cast a wider net of prospects plus help them rate/quote/bind as efficiently as possible. Here are some of the updates we’ve made:

  • We’ve opened the program to the independent agency channel.
  • We’ve streamlined the application and onboarding process, so that agents are onboarded more quickly and begin producing sooner.
  • We created “Aftermarket Express,” which enables online quotes and instant binding through Arrowhead Exchange for eligible accounts.
  • Producers can access accounts 24/7 to schedule payments, download policy forms, and more.
  • Policyholders can access their accounts 24/7 to process payments and/or set-up automatic recurring payments.
  • Claims services for the Express product moved to American Claims Management, our claims subsidiary, a one-stop shop for claims and risk management, and claims unit led by an ASE certified mechanic.
  • Value-added services such as SP-2 for assistance with automotive employee recruitment and 1moresecond  for free online driver safety courses for insureds.

 

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