AIADA`S Affinity for CNA National

Vol. 192 • Issue 4
Automotive Industries
CNA National Warranty
Corporation special report
Dealers—Why a
change to CNA National
will do you good
ai-online.com • autoindustry.us
Staking Our Claim—
Why CNAN’s Call Center
is your service manager’s
best friend
Agent Testimonials —
Why the Industry’s “Best of the
Best” Choose CNA National
for their Dealers
AIADA’S Affinity
for CNA National
Visit CNANational.com
Joe Becker, president and chief executive officer, CNA National.
Our longevity and success can be attributed to the relationships we create, develop and maintain with our consumerfriendly products, our efficient and fair claims practices, and superior participation programs. For more than 30 years
we’ve been working with our agents and dealers to develop the partnerships that are critical to long-term success.
Our foundation is built on vast industry experience and supported by the strength of our parent company. This is what
has distinguished us from other providers and made us a recognized choice of dealers nationwide.”
contents
AUTOMOTIVE INDUSTRIES
(ISSN 1099-4130)
Volume 192 Number 4. December 2013
Published Quarterly by Automotive Industries Ltd . Issue date: Q4 2013
3859 Shannon Run, Versailles, KY 40383.
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POSTMASTER: send address changes to Automotive Industries
PO Box 1510, Versailles, KY 40383, USA
contents
AIADA’s affinity for CNA National...................................................................................................... 2
Introducing CNA National................................................................................................................ 3
Making a smooth transition to CNA National.................................................................................... 4
Look before you leap....................................................................................................................... 5
Cutting-edge technology puts agents and dealers out front............................................................. 6
Automotive Industries is published by:
Automotive Industries Ltd.
Harnessing the power of e-commerce............................................................................................. 7
Publisher: John Larkin
[email protected]
+1 313 262 5702 (IP 5101888888)
CNAN agents share their views....................................................................................................... 8
Service managers roundtable in Scottsdale..................................................................................... 9
Editor: Ed Richardson
[email protected] • +27 (0) 41 582 3750
Achieving F&I excellence!™............................................................................................................. 9
ROB WHITE
advertising (at) autoindustry.us
+44 (0) 20 8202 3770
Staking our claim – why our call center is your service manager’s best friend................................. 10
www.autoindustry.us • www.ai-online.com
PRINTED IN THE USA
About CNA National Warranty....................................................................................................... 11
AIADA’s Affinity for CNA National
CNA National has been an endorsed Affinity Partner of the American International Automobile Dealers Association
(AIADA) since 1995. AIADA membership comprises more than 80% of all import auto dealers in the country.
“Our members
consistently emphasize
the quality and consistency that
are hallmarks of
CNA National’s business
philosophy.” — Cody Lusk,
president, AIADA
“As AIADA’s longest-serving Affinity Partner,
CNA National has provided our dealer members
with service contracts that are customized to
individual dealerships, along with products
and services to improve their F&I profits
and CSI scores. AIADA members have
especially benefited from the AIADA Equity
program—which allows them to earn
underwriting profit and investment income
on their service contracts.
“We are grateful to have CNA National
as one of our Affinity Partners and hope all
dealers will take the time to see what CNA
National can do for their businesses.” AI
2 to learn more go to www.cnanational.com
Introduction
Introducing CNA National
CNA National’s business is based on a commitment to being the best product and service provider
in the industry. For more than 30 years we’ve worked to accomplish that goal by clearly saying what
we will do and then doing what we say. While anyone can claim to be the “best,” we have more
than three decades of continued success supported by our basic philosophy of providing valuable
and profitable product platforms with a customer-centric service model. We recognize that in our
business, the relationship does not end at the time of sale, but instead, it is just beginning. By
combining a comprehensive menu of products with unparalleled service, CNA National has become
a leading choice of dealers nationwide.
Founded in 1982, CNA National has been providing automobile
dealerships with unparalleled program offerings combined with
award-winning service by meeting the following criteria:
• Offering dealers a mix of products that fit their specific
F&I needs.
• Creating opportunities for dealers and agents to
maximize up-front profitability.
• Designing programs that are transparent
and easy to understand while being
comprehensive enough to satisfy the
market’s needs.
• Providing security through solid
underwriting and insurance backing.
• Developing participation programs
that are customized to fit our clients’
specific needs.
• Being committed to providing the
finest administrative services in the
areas of sales, risk management, dealer
administration and claims.
Why Choose CNA National?
Today, more than ever, it is important to select
business partners who not only contribute but are committed
to your success. We understand that a program’s success requires
balancing the need for F&I income with those of the customer.
Whether it is a vehicle service contract, GAP, tire-and-wheel or
warranty program, all of our products have been designed with
both profitability and long-term customer satisfaction in mind.
Committed to Your Success
Dealers continually compliment CNA National on the quality
of service and support they receive from our organization. From
our sales and administrative support teams that assist in dayto-day program management issues, to our underwriting
and risk management groups that are focused on
“Supporting and growing successful
long-term relationships has been the
key to our success.”—Joe Becker,
president and chief executive officer,
CNA National
providing the best product at the best price, our staff
is fully committed to delivering the highest level of customer
service. Our claims administration process is geared to fast and
efficient service, a hassle-free process for the service department
and the goal of getting the customer back on the road as quickly
as possible. These are the ways we put the customer first and are
the foundation for our company’s success. AI
Automotive I n d u s t r i e s 3
Making a smooth transition
to CNA National
Moving to a new service contract provider is easier with the right preparation.
Anyone associated with the automobile industry will have
experienced how much faster the pace of change has become
in recent years.
Change is inevitable and, at the dealership level, you have to
manage change every day. This can be especially true when you
consider making a decision to change vehicle service contract
providers. Programs evolve, and over time it is important for
dealers to evaluate whether their service contract provider still
meets their needs. Changes in product, a company’s financial
strength, underwriting and selling opportunities all are good
reasons to consider changing service contract providers.
As with any change in life, it is always best to make the
move on your own terms before you are forced into
implementing change on someone else’s terms.
“At CNA National, we take pride
in being efficient administrators
of change.”—Alan Miller, senior
vice president of sales
At CNA National, we take pride in being efficient
administrators of change, from our own internal
processes to proven processes with our dealerships. And in
the end, our dealers realize that “a change can do you good.”
While change is inevitable, it does not have to be a painful
process. With experts in every part of the dealership’s business,
including reinsurance and profit-sharing programs, we can also
advise dealers on the best way to maximize profits for longterm wealth-building and financial security. At CNA National, we
embrace change by positioning our dealers for success. We
work hard to make change work for you, ensuring that switching
to CNA National isn’t just an event; it is the beginning of a very
profitable process.
Managing Change at the Dealership
We have identified five key areas that should be addressed
when managing change at a dealership:
1) The commitment to change must be fully embraced by the
dealer and the dealer’s management team.
2) The necessary resources to manage the change have to be
identified before the process begins.
3) There has to be a documented process for how the change
will occur.
4) The necessary management oversight has to be in place for
the execution of change.
5) A follow-up plan must be designed and implemented to
ensure the change process is working.
The completion on these five key areas is
critical to a successful transition.
Managing Change from Within
We have developed several processes
at CNA National for managing and
implementing change. For new dealership
installations, CNA National provides
additional personnel to assist our agents.
We also have regional vice presidents
(RVPs) who serve as resources for
agents. Each of our RVPs has first-hand
experience in the automobile industry and
is well versed in the principles of quality
customer service.
Working with our local agents, our
regional vice presidents can help dealerships in
several ways:
• Training on product knowledge and effective sales techniques.
• Training office personnel in electronic procedures for
e-contracting and all administrative processes.
• Training the service department on the proper method of
handling claims.
• Training cashiers to collect deductibles.
As part of our focus to effectively manage change, CNA
National has developed an installation process specifically
designed for a seamless implementation. Regardless of a
dealer’s size, we are committed to providing a smooth transition
to all of our product platforms. AI
4 to learn more go to www.cnanational.com
Reinsurance
“
Reinsurance programs can
be an effective tool for generating
long-term personal income.
”
Look before you leap
When managed successfully, reinsurance can be a smart, long-term investment strategy
for individuals and business entities.
Maximizing income is always a top priority and, for many
dealers, reinsurance has become a viable option for increasing
long-term profitability. By definition, the purpose of a
reinsurance program is to transfer risk from the primary insurer
to a dealer-owned insurance company. This allows a dealer to
recognize the potential benefits of any underwriting profit and
investment income. Given the combination of our well-defined
implementation process, relatively low start-up costs and the
possibility of substantial returns, CNA National’s reinsurance
programs have become effective tools for generating long-term
income for many dealers.
Understanding CFC and NCFC Structures
Reinsurance programs are tools that have been developed to
generate long-term personal income. Their value lies in potentially
producing underwriting profit and generating investment income
that will, over time, compound and build equity. With CNA National,
dealers have the ability to choose the structure that aligns with
both their short- and long-term financial goals. Both structures are
set up to qualify and maintain U.S. tax-holder status.
Controlled Foreign Corporation (CFC) – “Controlled” in
the sense that a single shareholder typically owns 100% of the
company; “foreign” in the sense that it is not domiciled in the
United States. Tax elections are almost always applied only to
investment income, and dividends are taxed at favorable rates.
Non-Controlled Foreign Corporation (NCFC) – A company
with multiple owners in which no one dealer controls more than
10%; 100% owned by dealers, providing a superior dividend
feature plus a defined redemption formula.
Program highlights:
• Designed as a long-term investment with the potential for
generating substantial future returns
• 100% dealer-owned company
• Potential tax deferral
• Dividends taxed at favorable rates
• Investment income accrues to the reinsurance account
• Low ceding fees and accelerated earnings formulas to generate
higher profit more quickly than other programs
• Access to independent experts to help set up and manage a
dealer’s account to help meet their goals
Transparency Builds a Better Reinsurance Program
Dealers in reinsurance must recognize they own a real
insurance company that, like any other company, must be
properly managed in order to ensure the maximum return on
investment. It is important that the CFC or NCFC managers
provide transparent communication, and the participants
understand that they have entered into a reinsurance treaty
where there is a true transfer of risk.
Equally important is that the provider has personnel solely
dedicated to interaction with the participants, including regular
distribution of relevant financial information. Reports should
include data on premiums written and earned, as well as claims
on a monthly, quarterly and year-to-date basis.
A Clearly Defined Exit Strategy
One of the most common questions participants have when
considering reinsurance is, “How do I get my money out?” Before
you enter into any reinsurance program agreement, have your
legal and financial representatives review all contracts, including
portions covering the profit distribution and exit process. A best
practice is that the program should have a clearly defined exit
strategy, informing the shareholders of the process to exit and
obtain their capital.
Please Note: Reinsurance has a unique organization and
purpose within the automobile industry. This column provides only
one perspective and is not intended as legal or financial advice.
Please consult your attorney and financial advisor before making
any decision about reinsurance. AI
Automotive I n d u s t r i e s 5
Technology
Cutting-edge technology puts
agents and dealers out front
A multi-million-dollar investment in the latest hardware and software resources is placing
CNA National’s agents and dealers in the technology fast lane.
CNA National recognizes and embraces the commitment
needed to meet today’s technology demands. In today’s fastmoving technological environment, what is considered innovative
one day can become a basic expectation the next. To help deliver
on our commitment to adopting a cutting-edge approach, CNAN
has undertaken a multi-year, multi-million-dollar initiative to rebuild
our internal system infrastructure. This investment will
“We have embraced our role as
an industry leader.”
—Brian Pendergast, chief
information officer
allow us to provide our customers with the robust, secure,
flexible and fast technical platform that is critical to our success.
The days of submitting a paper contract in an envelope with a
stamp are quickly becoming ancient history. More than ever, we
see a higher demand for online transactions, which is illustrated
by the fact that the majority of CNAN’s business transactions are
transmitted through our e-commerce platforms—a percentage
that is only expected to increase.
“We want to be on the forefront of the industry’s technological
transformation from being largely paper-based to being fully
integrated with electronic commerce best practices,” says Brian
Pendergast, chief information officer for CNAN.
The company’s investment in both finances and personnel
reinforces its mission of maintaining a competitive advantage
in the marketplace. A recent transition to an entirely
new network environment has translated into faster
communication and enhanced scalability. This
is accomplished through hundreds of servers
capable of handling greater data loads and
higher volumes with faster response times.
CNAN is utilizing the latest technology
available from industry-leading vendor
partners:
• Cisco Systems
• EMC
• F5 Networks
• Hewlett Packard
• Microsoft
• Oracle
• VMware
“This network and data center investment is truly just the
end of the beginning phase of our efforts.” says Pendergast.
“Our company culture and business philosophy have evolved to
ensure that our clients enjoy the full benefit of greater efficiencies
and rapid access to information. The result is a more efficient
experience for dealerships today, and more comprehensive
strategic planning with added resources for tomorrow.” AI
High-speed engine driving CNA National
CNA National’s commitment to technology is demonstrated by its multi-million-dollar
investment in a new network to increase stability, speed and functionality.
6 to learn more go to www.cnanational.com
e-Commerce
Harnessing the power
of e-Commerce
The personnel and technological resources CNA National is placing behind its e-commerce capabilities are
two reasons that dealers prefer doing business with the industry leader. Every dealership is different, and for
that reason CNA National has aggressively worked to integrate with as many menu providers as possible.
STRATEGY
One of our competitive advantages in e-commerce is that we created
our website for e-contracting, enabling dealers who do not want to use
a menu to have a simple, straightforward place to e-contract.
“There has been an increase of technological savvy in the
industry,” says Spencer Lyman, vice president of e-commerce at
CNA National. “We are proud that we were at the forefront of using
our web services to interface with menu providers.”
Our active relationships with numerous vendors give quality
options for dealerships that prefer to work with menu providers.
This allows F&I managers to sell products in a manner that fits the
dealership’s culture.
“Our attention to the needs of dealers is why we embrace
working with smaller regional menu providers,” says Justin
Eichmann, e-commerce manager. “We want them to succeed in
their environment. Our job is to listen to what works for our dealers
so their F&I managers deliver better customer service.”
This includes ongoing enhancements of current services to
increase customer satisfaction.
“We are continuously working on simplifying and speeding up
our existing e-contracting services,” says Lyman. “This is what our
dealers want, and we will provide it for them.”
RATING SERVICES
With an enhanced e-commerce infrastructure, CNAN can
quickly respond to the marketplace and to opportunities identified
by dealers and value-added networks.
“Our resources to rate products based on a rapidly changing
automotive environment and release those changes to the rating
structure in a matter of hours is the primary business driver,”
says Brian Pendergast, chief information officer at CNA National.
“The ability to customize product rating changes in requested
timeframes to individual automotive dealerships is a level of service
that is very hard for our competitors to duplicate.”
What also cannot be duplicated is the quality and depth of business
intelligence CNAN provides to its dealer and agent networks.
“We do not just regurgitate numbers,” says Pendergast. “Our
analysis provides insights into productivity at both dealer and agent
levels. The information can be downloaded in real time throughout
the dealership on both mobile devices and desktops.”
The addition of a dedicated e-commerce department with
industry experience to attend to menu providers has also
developed into a clear competitive advantage.
“Our future strategy includes implementing more business
intelligence tools at the forefront of our new development,” says
Lyman. “It will help agents monitor their dealerships and give
personalized service at a faster pace. Our focus is to provide tools
to help agents so they can bring value to dealerships.”
WEB-BASED SERVICES
Agents and dealerships with authorized access to our
secure website can take advantage of an ever-expanding list of
online applications, from determining dealer and retail service
contract prices to verifying whether a specific contract is in
force and more.
Online applications include:
DMS Integration
Available through the dealer’s ADP, DealerTrack/Arkona,
Automate or Reynolds and Reynolds system.
QuikQuoteSM
Fast access to service contract rating estimates based on year,
make and model.
QuikRateSM
Accurate pricing for eligible terms and coverages based on the
VIN; each dealership can set its own preferences based on the
product mix it prefers to sell. Available with DMS integration and
third-party menu providers.
QuikContractSM
E-contracting option to complete and print vehicle service
contracts.
QuikRegisterSM
Calculate dealer cost for service contracts and/or download
saved QuikRate transactions.
QuikRemitSM
Submit service contracts to CNA National electronically.
QuikPaySM
Receive payment for claims by credit card within hours of
approval.
Contract Verification
Verify active/expired service contracts and coverage information.
Claim Summary Report
Enter a claim number to generate a specific claim report.
Cancellation Refund Calculator
Follow the prompts to enter the necessary data and receive an
immediate quote on the amount to be refunded to the customer if
a service contract is cancelled. AI
Automotive I n d u s t r i e s 7
Testimonials
CNAN agents share their views
This is why our agents do business with CNA National:
Joel Kansanback,
president of the Automotive
Development Group
When you sell CNAN’s product it is better
than the factory program because the
dealership gets paid full retail, and the
service department is happy because
CNAN answers the phone in 10 seconds
or less. A lot of people in the service
department know about CNA National,
and know they do a good job.
Randy Crisorio,
president and CEO of
United Development
Having a team of professionals is really
important, and CNAN in particular has a
lot of great experience and one of our
claims to fame is that we don’t have
problems with our claims administration
– that is really what you want.
When I go back to the dealer, I can discuss
claims in detail and it is connected to
driving profitability to their reinsurance
company. By having people back at CNA
National diving into the claims, I can give
them real-world information.
Rick Taylor,
president of Dealer Based
Services
We have been representing CNA National for over
15 years and our staff is very confident in their
programs and their people. We know new
programs are thorough and will not create
problems down the road. From day one it
has been an excellent product to bring to the
industry for the retail success of today’s auto
dealer. They attract a lot of quality relationships
with dealers that last for a long time.
Johnny Garlich,
president, Heart Dealer
Financial Services
8 to learn more go to www.cnanational.com
Dealership training
“
CNAN is committed to ensuring that
everyone who works with us is equipped
with the skills they need.
”
Service Managers Roundtable in Scottsdale
Experienced leaders in the auto service industry are given
the rare opportunity to share advice, tips and techniques
with their peers when auto dealership service managers
from across the country gather in Scottsdale, Arizona, for
the Service Managers Roundtable.
“The roundtable participants set the agenda to ensure they
benefit from the topics as much as possible,” says Tom Luzader,
moderator of the roundtable. Discussions often include building
and maintaining a strong customer base or establishing a more
efficient process for repair orders.
“As an industry leader, we feel it is our duty to provide a forum
for service managers to facilitate dialogue, present ideas and offer
solutions for the challenges unique to their department,” says Joe
Becker, president and CEO of CNA National. “Further evidence
of our commitment to this program is the fact that there is no
registration fee.”
For more information or to inquire about the event,
qualified dealerships that sell CNA National can contact
[email protected] or call directly at (800) 345-0191
extension 796. AI
Achieving F&I Excellence!™
This F&I Manager Certification Course is the premier,
consultative, menu-based program presented by Ron
Reahard, president of Reahard & Associates and a nationally
recognized trainer, author and NADA speaker.
Benefits of this training include:
• Changes manager’s focus from “selling” products to helping
customers, increasing product sales, profits and customer
delight with the F&I process.
• Implements a customer-centered, needs-based F&I
presentation based upon the customer’s agenda, not the F&I
manager’s agenda.
• Provides basic and advanced sales techniques, with 10 great
visual aids and service contract closes.
• Shows managers how to evaluate and analyze credit from a
lender’s perspective in order to provide paper buyers with valid
reasons to approve the credit-challenged customer.
• Educates managers with regard to the laws and regulations
that impact F&I on a daily basis.
• Ensures that proven, consistent F&I processes and best
practices are utilized.
• Increases sales of all F&I products by providing an F&I
process that enables managers to collapse confrontation at
the point of contact.
• Creates in every F&I manager a tradition of excellence and a
genuine belief in their products and their own abilities.
Continuing F&I Excellence!™
For those who have successfully completed Achieving
F&I Excellence!™, Reahard offers an advanced course
to further develop skills and techniques to increase a
dealership’s F&I income. AI
Automotive I n d u s t r i e s 9
Claims
Staking Our Claim—
why our call center is your Service
Manager’s best friend
Industry veterans with auto dealership experience answer calls in record time.
The CNA Way
“Fast, fair and hassle-free.” Dealers and agents know they
can count on CNA National to pay every claim that is covered by
one of our contracts…..period. This clearly stated approach to
claims administration creates a better outcome for customers and
a positive atmosphere for our employees, and it is one of the keys
to dealer retention and referrals.
“Our philosophy for
processing claims is the backbone
to our success.”—Don Oliver,
executive vice president
Our Claims Department is focused on providing
efficient service whether interacting with customers, dealers,
service managers or service advisors. We strive to handle each
call with the highest quality and attention to detail to make sure we
get the customer back on the road as quickly as possible.
The technical skill of our claims adjusters, combined with
our technology, makes it possible for us to process more than
100,000 incoming calls a month with essentially no hold times.
The ability to record and play back calls for review is a valuable
tool for continually raising the bar for our service levels.
Claims managers and supervisors play an important role in
coaching and mentoring, as well as passing along best practices.
They inspire excellence and motivate employees through leading
by example. During peak call volume periods, they will answer
phones and take calls as needed to keep our promise of
prompt response.
Getting the Right People for the Job
At CNAN, getting and keeping the right
people is critical to our success. For us that
means finding the right type of experience
and providing the type of training that
instills the “CNA way” of doing things
the right way. The vast majority of our
adjusters are former service advisors or
service managers. Since many of them
have done business with us while working
in those positions, they have a real-world
understanding of both sides of the claims
operation. Our commitment to making sure we find
the right type of person means that we keep them longterm, which is reflected in our claims department’s average
tenure of nearly 10 years.
We understand that proper claims handling on our end
translates into greater efficiency for the dealership’s service
department – which in turn contributes to increasing your
bottom line. AI
10 to learn more go to www.cnanational.com
“
CNA National is the only service contract company to
be voted a Best Provider in the Dealers’ Choice Awards
for nine consecutive years.
”
About CNA National Warranty
CNA National is the only company to be named “Best Service Contract Provider” eight times
(2005-2010 and 2012-2013) as well as “Best Reinsurance Provider” three times (2011 – 2013).
We are a wholly owned subsidiary of CNA, which is one of the nation’s oldest and largest insurers, headquartered in Chicago
and founded more than 100 years ago. In its underwriting as well as its investments, CNA maintains a strong balance sheet—the
financial foundation of any insurance organization—through a time-tested and disciplined approach.
With more than $55 billion in assets, CNA is rated A (Excellent) by A.M. Best Company. This financial strength positions CNA
as one of the largest commercial lines insurers in North America.
Corporate Offices
CNA National Warranty Corporation
4150 North Drinkwater Blvd
Suite 400
Scottsdale, AZ 85251
(800) 345-0191 or (480) 941-1626
Office Hours
Monday - Friday: 8 a.m. - 5 p.m. MST
For further information, please contact:
Randy Rife
Vice President of Sales Administration
[email protected]
800.345.0191 ext. 720
Find out more at www.cnanational.com
CNA National offers a variety of products that are
designed for ease of administration while meeting
consumer demands and creating dealer profitability:
•
•
•
•
Vehicle Service Contracts
Guaranteed Asset Protection (GAP)
Tire and Wheel Protection
Limited Warranty Programs
Consistency Now & Always
Automotive I n d u s t r i e s 11