Author: Eric Fifield, Chief Revenue Officer
Date: 5/20/2026
For the market context behind these six areas, see our companion piece, “Why Dealers Are Suddenly Feeling Reinsurance Pressure, and What’s Actually Behind It.”
Most dealers who are feeling reinsurance pressure right now didn’t do anything obviously wrong. They ran their programs, sold their products, and trusted the numbers they were seeing. What they often didn’t have was a clear, ongoing view of the areas where exposure quietly builds over time. The market shifted underneath programs that were built for different conditions, and the gap between expected and actual performance has been widening for years. What’s done is done, but the exposure that’s still building from here can be identified and addressed. These are the 6 areas worth taking a close look at right now.
Not every product in your F&I lineup carries the same weight in your reinsurance program. A mix that worked a few years ago may be creating unnecessary volatility today, particularly if certain high-risk categories have grown as a share of your portfolio. The question isn’t just which products are selling. It’s whether the overall balance is helping to offset potential losses or quietly amplifying them.
Coverage terms, deductibles, surcharges, and limits that were set a few years ago may no longer reflect what today’s market looks like. Claims costs and repair severity have shifted. When coverage structure falls out of alignment with what’s happening in the field, the gap doesn’t announce itself. It just quietly erodes profitability in your reinsurance program until a correction becomes unavoidable.
When a program is performing well, it’s easy to let standards soften in favor of volume. That trade-off rarely feels significant in the moment. It tends to show up later, all at once, when loss ratios have drifted too far to be corrected gradually. Proactive underwriting means making small, measured adjustments along the way. Reactive underwriting means absorbing the full cost of not doing so. Most of what dealers are experiencing right now is the latter.
Do you have a clear picture of your outstanding underwriting risk right now? Most dealers don’t, and that’s not criticism, it’s a structural issue. Participation gaps and under-reserved positions don’t always appear in day-to-day reporting. They accumulate quietly, and they tend to surface at the worst time. Getting a real view of where risk lives in your program is one of the most valuable things a dealer can do in a volatile market, and it’s a core part of EFG’s reinsurance review process.
Early claims are one of the clearest indicators of where a program is heading. When initial claim activity spikes around certain products or time periods, it’s almost always pointing to something: a process issue, a product misalignment, a training gap. The dealers who catch these signals early and act on them tend to avoid the larger corrections. The dealers who treat them as noise tend to face those corrections later, at a much higher cost.
The front end of your F&I operation has a direct effect on what flows into your reinsurance position. When rate structures and loan terms are misaligned with your market, they limit product flexibility, create friction at the point of sale, and reduce the volume of products that build value in your program. Making sure your lender relationships and financing structures are working for you, not against you, is part of a complete program review.
If you looked at this list and found yourself uncertain about more than one area, that’s worth paying attention to. It doesn’t mean your program is in crisis. It means you may not have a full picture of where things stand. And in a market like this one, gaps in visibility tend to be expensive.
What’s done is done. Contracts already written can’t be changed. But the areas that are still building exposure going forward can be identified and addressed. That’s what EFG’s reinsurance team gives dealers: a real look at where the program stands, where the pressure points are, and what proactive steps can protect performance from here.
Schedule a no-obligation conversation with EFG’s reinsurance experts to find out where your program stands.
