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Non-Tech : APCO Automobile Protection Company -- Ignore unavailable to you. Want to Upgrade?

To: Nukeit who wrote (1530)	3/10/1998 10:36:00 AM
From: Cary C	Read Replies (1) \| Respond to of 3351

Thanks for the info that was posted on the yahoo board. After reading it I found some things that I believe are wrong. I called Todd to make sure that I relayed the information accurately. I will post when I get home from work later today. Here are some more numbers regarding the Allstate deal. Currently Allstate has 16,000 agents and have 19.1 million cars that are insured. Of the 19.1 million, 8.4 million are less than 5 years old and are eligible to participate in the warranty program. As the other cars are replaced with newer vehicles they will be eligible also as long as they are less than 5 years old. That's a lot of cars! Cary

To: Nukeit who wrote (1530)	3/10/1998 11:41:00 AM
From: James Strauss	Respond to of 3351

>>>They get paid a fee each time a transaction is made. Typically their fee is $30.00 per claim. APCO is only an administrator not the insuror. But in reality they have some of the same functions of the insurance company. They hold all monies until they contract has expired. They reserve for future losses. They Pay Claims and handle customer service. At the end if any money is left they keep that profit..or if their is a loss they share the loss. So APCO gets to pool large amounts of money for Claims that will be paid in the future and with a short Claims life of 3-7 years with limited liability. Typically the first claims will occur 3 to 5 years into the life of the contract The claims have an average of 300 to 500 dollars.<<< ********************************************************************** Nukeit: It looks like APCO gets about 500 up front for each contract... Let's apply the following: 1. 500 earns 7% for 3 years = 612 dollars... 2. If an average of 400 is paid for repairs, APCO has 212 left over... 3. They get 30 per claim... So, they wind up with 242 (212+30) average profit... All we need to know is the average number of cars they have under new contract each year to get a handle on gross profits... With Allstate and SAH expansion the multiple x 242 should grow... Jim

To: Nukeit who wrote (1530)	3/11/1998 2:23:00 AM
From: Cary C	Read Replies (2) \| Respond to of 3351

It was as I had expected. The post regarding how APCO handles the money from the warranties is way off. I called the company today to verify. I was referred to someone who was definitely in the know in regards to how it is handled. The following is a summary of what goes on. 1. Obviously the person purchasing the warranty can either pay cash for it or finance it. The dealership then writes the check payable to the insurer (not APCO) and sends it to the insurers lock box (not APCO). 2. APCO is notified and accounts for the money both as a cash amount and a liability on their balance sheet. 3. Approximately once a month the insurer and APCO verify and agree on the warranties and the amounts that have been received since the last time they reviewed them (approximately one month). At that time the insurer takes their premium and APCO takes the balance for administration, marketing and profit. 4. After the insurers take their money, they give APCO a certain % in a trust account to pay for claims that may be issued for the policies that they are covering. When a claim is processed, APCO pays both the amount of the claim and their processing fee from the monies in the trust account. 5. The insurance companies do an audit twice a year. 6. This is the important part..... APCO bares NO CLAIM RISK at all. Hope this helps. Cary