Profit Participation Programs
DKP’s profit participation programs allow dealers, lenders, and agents to:
- 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 protection products back into their businesses, our clients are better positioned to build wealth and long term.
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 multiple profit participation plans:
The reinsurance concept allows the dealer, lender, or agent 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 These profits can be withdrawn regularly to provide working capital or create long-term wealth.
The retrospective concept allows the dealer, lender, or agent to participate in a portion of the underwriting profits while assuming no risk. The administrator holds the premiums and allows the dealer, lender, or agent 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.