Quantum Re Quantum Re

Captive management for independent dealers

You already sell service contracts. Why is someone else keeping the profit?

Quantum Re helps independent auto dealers form and run their own reinsurance company, so the reserves and underwriting profit from every contract stay with the dealership.

Book a 20-minute call See how it works
  1. 01 · Your dealership Sells a service contract
  2. 02 · Dealer cost The part that used to leave
  3. 03 · Reserves, held in trust Pay customers’ claims
  4. 04 · Your reinsurance company Keeps what’s left over

The opportunity

The part of every contract that leaves your store

When you sell a service contract, you keep your markup. Your dealer cost goes out to a reserve that pays future claims. When claims come in lower than the reserve, what’s left is underwriting profit. Today, that profit belongs to an outside company, not to the dealer who sold the contract.

Today

  1. A customer buys a service contract Sold by your F&I team, as usual.
  2. Your markup stays in the store Front-end profit.
  3. Your dealer cost goes out Sent to an outside warranty company.
  4. Their reserves pay the claims Held and managed by someone else.
  5. What’s left over is their profit You never see the back end.

With your own reinsurance company

  1. A customer buys a service contract Same products, same sales process.
  2. Your markup stays in the store Front-end profit, unchanged.
  3. Your dealer cost goes to your company Your own reinsurance company.
  4. Your reserves pay the claims Held in a trust account, protecting customers first.
  5. What’s left over stays with you Underwriting profit belongs to your company.

Simplified illustration. Actual results depend on claims, cancellations, products and program costs, and are not guaranteed.

Not just for big groups

Franchise dealers have done this for decades. Now it’s practical for independents.

A dealer-owned reinsurance company is a separate company you own. It takes on the claims risk of the service contracts and other F&I products your store sells. Claims are paid from its reserves. What’s left after claims and costs belongs to your company.

You don’t need to be a large group. As a rule of thumb, it’s worth a conversation if your store sells about 7 or more service contracts a month. Stores selling fewer can start with a profit-sharing program.

Compare the three programs

What we do

One point of contact, from setup to the annual filing

We coordinate everyone a program needs, so you don’t have to.

How it works

From first call to a company you own

  1. Discovery call

    Twenty minutes. We look at your monthly contract volume, products, pricing and state.

  2. Program design

    We recommend the right structure for your store and walk you through the economics in plain language.

  3. Setup

    We form your reinsurance company, open the accounts, load your contract forms and connect claims and reporting.

  4. Launch & run

    Your F&I team sells as usual. We run the company. You review a short report each quarter.

The full process, step by step

Where the profit comes from

Three sources

  • Underwriting profit. The reserves minus claims and cancellations.
  • Investment income on the reserves while they are held.
  • Your own inventory. Clean cars and good reconditioning mean fewer claims, and a better result for your company.

What to know up front

The honest part

  • It builds; it doesn’t switch on. Premium is earned over each contract’s life. Money can be released after the book has seasoned.
  • Your company carries the claims. A rough claims year means a smaller result. The upside and the risk are both yours.
  • Structure follows the state. Requirements differ by state. We set it up correctly for yours.

Built by a dealer, for dealers

We know the dealer side first-hand

Quantum Re’s founder, Andrei Shesternev, owns and runs an independent dealership. He has sold the contracts, managed the reconditioning, watched the claims and kept the books himself. This isn’t theory from an insurance office.

About Quantum Re
  • 20+years in the automotive industry
  • 15years running an independent dealership
  • 13years in service contract administration
  • ICCIE Certificate in Captive Insurance
    International Center for Captive Insurance Education

One question to ask your current provider

“What was the loss ratio on my book last year, and who kept the difference?”

Loss ratio: the claims paid on your contracts, divided by the premium.

Learn

Plain-English guides for dealers

All articles

Find out what your service contracts are really worth to you.

Book a 20-minute call with Andrei. We’ll look at your volume, your products and your state, and tell you plainly whether your own reinsurance company makes sense.

Book a 20-minute call or call 508-685-5845