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Reinsurance Programs

ARC’s reinsurance and participation programs allow dealers and lenders to either:

  • Establish their own insurance companies for maximum profitability and tax benefits, or…
  • Earn a percentage of underwriting profits without assuming risk.

By directing all or part of the premiums generated from consumer protection products back into their businesses, our clients are better positioned to build wealth over the long term and enhance dealer impact.

Reinsurance vs. retrospective agreements
While the term “reinsurance” is commonly used to refer to both reinsurance and retrospective structures, it’s important to understand the difference. DKP offers two kinds of profit participation plans:

Reinsurance plans increase dealer impact
The reinsurance concept allows the dealer or lender to own and control their own insurance company, which accepts premiums generated from vehicle service agreements and other aftermarket products. These companies are known as producer-owned reinsurance companies (PORC) or producer-affiliated reinsurance companies (PARC). The insurance company holds the premium reserves and earns all of the underwriting profits, plus investment income from these premiums. These profits can be withdrawn monthly to provide working capital or create long-term wealth.

Retrospective plans increase dealer impact
The retrospective concept allows the owner to participate in a portion of the underwriting profits while assuming no risk. The administrator holds the premiums and allows the dealer or lender, or to take up to 80 percent of the underwriting profits on scheduled payout dates as long as the portfolio is performing. Unlike a PORC or PARC, there are no annual fees or tax preparation required for a retro agreement.

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