Agents should ask questions and be more critical of their administrators. - IMAGE: Getty Images

Agents should ask questions and be more critical of their administrators.

IMAGE: Getty Images

“Agents need help. They need help to build, grow and manage a business. And these are resources the industry lacks,” says David Neuenschwander, chief sales officer (CSO) of Portfolio, a provider and administrator of reinsurance programs and finance & insurance (F&I) products for the automotive industry.

Neuenschwander has a long history in automotive at the dealership, agent and third-party administrator (TPA) level. He began his career at his family’s Central Missouri auto dealership then spent 13 years as an account executive and regional sales manager with Universal Underwriters/Zurich. He then worked for National Automotive Experts (NAE) and NWAN, where he served as director of agency development, vice president of sales, and eventually president. He took over as CSO at Portfolio in 2020, shortly after the provider acquired NAE and NWAN.

Holding a variety of roles gave him insight into what’s needed from many perspectives. He quickly noticed agents need help, and third-party administrators can provide it.

David Neuenschwander“Agents need more than a provider coming out to help pitch a single deal,” he says. “We need to look at this in a way that is much longer term. We need to ask, ‘How can I help you grow your business and grow it in a scalable way?’”

What Dealers Want

Neuenschwander says the need for help from agents and admins also has become more acute for dealers.

The pandemic disrupted the industry and presented it with opportunities for growth. “The shutdowns put a spotlight on agents and agencies,” he says. “It allowed some agencies to shine because it created opportunities that didn’t exist before. In other cases, it presented problems because dealers had different expectations.”

The move to digital arose as the largest disrupter. Digital retailing became the norm during the pandemic and transformed the industry and customer expectations. “Now customers don’t want to go to a dealership and kick tires for eight hours,” he says. “That’s just an outdated way of thinking that came to a head because of COVID.”

The massive push toward digital included F&I products. The winners in this game were those dealerships that mastered digital retailing.

But what’s lacking, he says, is an effective way to transition the F&I manager from in-person to virtual sales. “An experienced F&I manager is very comfortable looking a customer in the eye and having an hour to convince them of the value of F&I products,” he says. “Now it’s all just point and click.”

In surveys, Portfolio learned dealers need more education from agents. “They wish their agents would do more because they need knowledge that goes beyond F&I products. They also need help with digital marketing and retailing,” he says.

Many agents connect and train dealership personnel on their TPA platform but offer little help beyond that. But dealers are saying they need agents and administrators to help them build a digital strategy. “They need to know how to get started, and who they can rely on to help implement, monitor and manage things digitally. We must help facilitate that at the dealer level,” he says.

What Agents Need

The digital transformation created agent needs, too. Their needs go beyond products, brochures, customization and reports, adds Neuenschwander. Most TPAs bring these things to the table already. But they are many other offerings and considerations TPAs can offer.

Agents must determine other resources administrators can offer to help their agency thrive in a digital world. “Education helps solve problems regarding the digital retail experience, including how to achieve success with product presentation and sales,” he says.

Neuenschwander recommends interviewing administrators and asking: What else can you bring to the table? What more can you provide to help grow my business? What training do you offer for professional development? What mentoring do you have available? Is this mentorship a relationship? Or is a mentor only available to help pitch a dealership as needed?

“The needs of agents have transformed in recent years. Agents should ask more questions and be more critical of their administrators,” he says. “Ask, ‘What else can you offer?’ It has to be more than products.”

Pay Attention to Products

Without products, there is nothing to sell. Here, agents should expect new product bundles and combos, innovation and customization.

“Vehicles have changed, customers have changed, and behavior has changed, so ultimately products must change as well,” he says. “There are only so many things to cover on a vehicle. Customization as combos and bundles must be available at the administrator level to have the wherewithal to customize contracts and programs quickly to fit a dealer in size and scale.”

A forward-looking administrator also seeks to protect the vehicle of the future. “Providing protection is vastly different today than it was 15 years ago. Changes move faster than ever before. We don’t have five years to go through the product development process,” he explains. “A strong focus on innovation keeps administrators ahead of what is new.”

Protection for electric vehicles (EVs) is a key area for innovation. Questions remain over what protection these vehicles need and what buyers will want and pay for. “The products provided to EV owners must be different. It’s a different customer base with different expectations and needs,” he says. “Administrators should understand that and be ready to help agents and dealers address them.”

But limited EV data is a challenge. The number of EVs in use remains relatively small compared to vehicles powered by internal combustion engines. Tesla, the largest player in the market, shares little data with the market. Thus, the industry has little long-term data about what fails and when with EVs.

“There’s limited information on performance history to help dealers pick coverage to put into a contract,” he says. “The industry doesn’t know because there aren’t a lot of EV sales. But that will change over time.”

In the meantime, administrators can provide tremendous value in products and education. TPAs must function as consultants to agents and dealers. “We must provide knowledge and information to prepare agents and dealers to talk about these things,” he says.

New offerings also can be difficult for administrators to scale. “But that’s our job, and that’s what we should do,” he says. “We should provide the tools, products and coverage that agents and dealers want.”

The Bedrock of Administrator-Agent Relationships

It’s essential to build an agent- administrator relationship on trust, integrity and transparency, according to Neuenschwander.

He recommends agents consider the administrator’s intentions. Are they in the business just to sell contracts? Do they proclaim to be reinsurance experts? Then ask them to prove it out. “It’s easy to say, ‘We are great at this. No one does it as well as we do,’” he says. “Challenge these claims. Do not take them at face value. You risk losing a dealer’s business forever if your administrator cannot back up their claims with performance.”

“Make sure you interview the administrator and vet them well,” he concludes. “You don’t want to be caught by surprise later.”

Interview Tips

Neuenschwander recommends interviewing an administrator and asking the following:

  • What is your level of expertise?
  • What kind of experience do you have? “A startup is not bad if they are innovative and generating new products. But if they lack knowledge or experience, an agent should know that,” he says.
  • What is your expertise in risk assessment and management?
  • How do you assess risk?
  • How do you manage your book of business?
  • How often can I access loss information to share with my dealers?
  • What does your product development process look like?
  • How do you ensure your products, combos, and bundles remain current?
  • What is your market strategy when a new product goes to market?
  • How are you staffed?
  • What expertise can I access when a dealer has questions about reinsurance structures?
  • What does your claims operation look like? “Being able to deliver and perform when a customer needs help because their vehicle broke down is vital,” he says. “They need to be able to reach someone on the other end of the line. And the process must be efficient and easy.”

Ronnie Wendt is an editor at Agent Entrepreneur magazine.