SCHAUMBURG, Ill. — Zurich North America will focus heavily on F&I in 2018, a company spokesperson told F&I and Showroom magazine on Friday. The reason: hail.
The spokesperson said Zurich is reshaping its dealer property and casualty portfolio to address “persistent underperformance” due to hail losses as well as “overall profitability results in its P&C segments.” As a result, the company has decided to no longer renew P&C policies for select franchised dealers and independent dealers.
“We continue to offer P&C to all our large mega dealer customers nationwide and many of our franchise dealers,” the spokesperson said via email. “We also continue to offer F&I products to all dealers nationwide. In fact, we plan to continue substantial F&I growth in 2018.”
2017 was a historical year for weather- and climate-related events, which caused a record $306.2 billion in damage last year, according to a report from the National Oceanic and Atmospheric Administration. The NOAA said there were 16 events alone, including wildfires, hurricanes, tornados, floods and other natural disasters, that each cost more than a billion dollars in damage, including May and June hailstorms in Colorado and Minnesota that caused $3.4 billion and $2.4 billion in damage, respectively.
August’s Hurricane Harvey and September’s Hurricane Irma caused $125 billion and $50 million in damage, respectively, according to the NOAA.
In October, Zurich put third-quarter aggregate claims related to hurricanes Harvey, Irma and Maria at an estimated $700 million, adding that those events could result in estimated net-of-tax losses of $620 million. The company is scheduled to share full-year results on Feb. 8.
The spokesperson said that while Zurich’s actions are based on its current analysis, the company continually evaluates its portfolio to determine if conditions have changed to “allow us to provide insurance products and services on a sustainable basis in the future.”
“This move in no way diminishes Zurich’s commitment to providing products and services to the P&C automotive industry as well as the F&I marketplace,” the spokesperson noted. “In fact, Zurich remains one of the largest insurance and vehicle service contract providers for U.S. franchise auto dealers.”