Agent Entrepreneur’s Managing Editor, Diana Jacobi, recently spoke with Charlie Robinson, president and COO of Resource Automotive Group, to get a feel for what makes Resource unique and what sets them apart from the competition. Because Resource includes quite a diverse group of companies, including The Warranty Group and Virginia Surety, Resource is a great go-to source regarding thoughts about what the future holds in 2011 and what qualities and strategies an independent agent should have so that he or she can overcome any hurdles that come their way.
Tell us a little about your company and what you do to add value to the agent entrepreneur.
Robinson: Resource Automotive is a subsidiary of The Warranty Group, and we’ve been around since 1964. Our greatest value-add for agents, first and foremost, is the reputation and security we provide through Virginia Surety, our wholly-owned insurance company. Virginia Surety backs all of our products, so our agents never worry about the financial stability of the underwriter. Their clients appreciate this, as well.Also, we provide a one-source solution. We supply administration, underwriting, product pricing and compliance support. We provide the complete package, and agents are free to configure whatever program works best for themselves and their clients.
To understand our company, however, you must know that we approach the business very strategically. We look for every method to increase profit per unit. We utilize automation and technology at every opportunity, and we look at each department to identify profit leaks and develop new processes to assure maximum efficiency and leverage every customer touch point. Good examples are our pre-paid maintenance program, DriverPlus, which we configure and implement for our clients as well as our online claims system, TWGConnect, which gives our dealers an edge in claims submission and warranty management.
But we’re about much more than products. We’re about an operating methodology and systems that are proven to be successful in driving customer acquisition, retention and loyalty. That’s why we’re the world’s largest provider of independent service contracts across a wide range of consumer products in 33 countries.
You headed up F&I for Asbury Automotive Group for four years. How does the knowledge you gained on the public side impact your position as the president and COO of Resource Automotive?
Robinson: This is my second term with retail. I started out in the '70s, and I learned that when you are dealing with automobile dealers, you absolutely have to be able to see things through their eyes. If you can fully understand their needs, you are in a much better position to anticipate their needs and create a win/win for them and us.The world of public ownership has given me additional tools to measure our success and develop and implement winning strategies. The accounting requirements for a public company require a creative approach to program design and development to allow the client to achieve their financial objectives.
I know that one of the differentiators of Resource is the ability to offer dealers a wide range of service contract models. Can you describe these models and explain the advantages of each? Also, how long has Resource Automotive been offering these different options?
Robinson: Resource Automotive has been in the service contract business since the mid '70s. There are two basic approaches to the service contract business: programs that allow the dealer, in addition to collecting an upfront commission, to participate in the underwriting results, or a program that is direct from the underwriter and the dealer earns an upfront fee. Within the participation side there are a few different approaches. Among the models that dealers can choose are the controlled foreign corporation (CFC), non-controlled foreign corporation (NCFC), retrospective or a dealer obligor program. We are the industry’s largest provider offering all these solutions allowing us to structure a program to address what the client wants when they want it.When you look at these different models, on the participation side, a retro is something that might be appropriate for a public company, as choosing this option would get you as much revenue in the calendar year as possible, without contingent liabilities. An NCFC is a long-term investment, and while we do not give tax advice or accounting advice, in some cases it may give the dealer certain tax advantages. A controlled foreign corporation would be most similar to NCFC, except the dealer wholly owns it himself, without the involvement of any other dealers.
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