The Industry's Leading Source For F&I, Sales And Technology

F&I Products

Getting Resourceful

The magazine catches up with The Warranty Group’s Michael Frosch to discuss F&I, automotive retailing and the road ahead.

January 2011, F&I and Showroom - Feature

by Gregory Arroyo - Also by this author

It’s the largest single-source provider of underwriting and administration of service contracts and extended warranties, touting a global footprint that extends into a variety of consumer goods, from autos and electronics to major home appliances and travel. But as complex as The Warranty Group has become, it remains true to its principles, says Michael Frosch, the company’s president and COO of North American operations. Frosch opened up to the magazine and offered his vision of the road ahead for the automotive industry.

F&I: The Warranty Group and its Resource Automotive entity have been through a lot of changes. Can you get our readers caught up with where your company stands today?

Frosch: The big picture is The Warranty Group, whether it’s in China, Latin America or North America, or whether we’re talking protection products for electronics, appliances, travel coverage or automotive. Resource Automotive simply represents the auto side of our business.

F&I: What was the strategy during the downturn?

Frosch: The strategy was to work with the best of the best. It was about helping dealers through automation, enhancing our solutions and providing support to maximize the benefit.

F&I: Your insurance carrier, Virginia Surety, definitely won some battles in the trenches this year, picking up clients such as Safe-Guard and Interstate. What was behind that division’s success this year?

Frosch: There have been a lot of companies that have come in and out of our business. A lot of them thought they could do it, but, in the end, they couldn’t. Unfortunately, the only ones who got hurt are the dealers and their customers. So, what you saw in 2008 and 2009 was really a flight to quality, which obviously benefited us since the clients we picked up were looking for a partner with the focus and experience in this very specific business.

F&I: Talk about the company's ResourceVIP program, which you rolled out in 2004. If I’m not mistaken, it represents your first foray into inventory management.

Frosch: Well, our mission is to maximize income for our clients on a per-vehicle basis, and ResourceVIP supports that concept. It’s a custom program that helps dealers manage their returns on their inventory and allows them to see what’s moving, when it’s moving and what the requirements were for their inventory to move.

F&I: Where do you stand on all this talk about dealers combining sales and F&I roles?

Frosch: We continue to see great value in the F&I model. It has worked and it has been successful. However, we recognize that there is no
one-size-fits-all [solution], so we support our clients as they wish to be supported.

F&I: I’ve noticed a real pickup in interest for reinsurance. What are you seeing?

Frosch: Reinsurance remains a successful model in this industry, and it’s an extremely valuable tool if you partner with a company that understands it, has experience with it, knows how to handle claims, takes care of customers, knows how to price and configure the product and will act as a partner to you. And that’s what we bring to the market.

See, we’re not a monoline, one-approach kind of company. We have direct programs, reinsurance programs, dealer-obligor programs. We are the underwriter, the actuary and the administrative company, and we own our own compliance groups and entities. So, it really is about what our clients want to accomplish. I always like to phrase it as, ‘What you need, when you need it.’

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email: