On January 1st, Kristen Gruber was welcomed on board with Dealers Assurance Company, (DAC), as their new president. Since then, she has been focused on developing a new management team and creating the infrastructure needed to grow the business. She has spent the last four months putting the right people in place and getting a team assembled.
DAC has provided administrative and underwriting services to the VSC industry since 1977. Their business model is focused on reinsurance, where the producer has the opportunity to participate in the underwriting profits of the business through a wholly owned captive reinsurance company. “By aligning the interests of the producer and the insurer, DAC has been able to maintain consistent and profitable growth over the last 10 years. As a matter of fact, DAC surpassed $50 million of Capital & Surplus in 2013 and is now a Class VII Financial Size Category with A.M. Best!” stated Gruber. DAC has maintained an A- (Excellent) rating with A.M. Best for the past 28 straight years and is licensed in 49 states, plus D.C., with Hawaii currently in the works.
“Our vision is to be the leading reinsurance provider in our industry,” says Gruber, “providing profitable, long term partnerships, industry knowledge and creative solutions to our third party Administrator/Obligor (AO) customers. We want to continue to pursue opportunities in our specific area of expertise and related markets, while judiciously pursuing new product opportunities.” Today, DAC insures the typical array of F&I products such as VSC’s (auto, RV, powersports, Brown & White), GAP, T&W, Limited Warranties, Etch, Prepaid Maintenance, Appearance protection, IUI and Home Warranties.
Their target clients are established AO’s who produce and administer F&I products sold by dealers and retailers. “Our preferred customer has 3 characteristics,” explained Gruber, “Business acumen – they know this business and have been around the block. They know what pitfalls to watch for! They also have operational excellence – they’ve got the right processes, the right people, and the right technology to support the business. And finally, our customers understand DAC’s business priorities – the AO is motivated to minimize risk and maximize underwriting profitability while treating every customer fairly.”
When asked how she got her start, Gruber says that as a junior in college, she wrote to the Society of Actuaries to get a list of insurance companies with internships. “I loved my math classes and from what I read, actuarial science seemed like a good fit.” Her first interview, and offer, was with Great American Insurance Company in Cincinnati. She accepted the job as an actuarial intern on the spot. “I spent the following summer as an actuarial intern in their Personal Lines division and was then hired by Great American after graduation.”
Gruber never took the exams to become an actuary but says she enjoyed the work.
She did not want to be pigeon-holed into an actuarial career and preferred the product management track where you get a little bit of everything. “You have to understand the numbers and be able to analyze the data, but you also get customer interaction. You are out there in the market brainstorming with clients. I didn’t want to be stuck in an ivory tower somewhere, limited to rate-making!” So although she never pursued an actuarial career, Gruber says she has a soft spot for the rigors of actuarial analysis. She has created and managed several data analysis departments over the years, analyzing underwriting performance.
When she is not working, Gruber enjoys Cincinnati’s extensive community of art, theater, opera and music. Growing up as one of six kids, she says she is lucky to have most of her family living nearby. With four sisters, Gruber says there is always something to celebrate and they regularly get together. Recently, she signed up for a couch to 5K training program and is trying to get back to her passion of running, after being forced to take a break after undergoing reconstructive foot surgery. She has always had an extremely active lifestyle and has played competitive ultimate frisbee. She also enjoys swimming, spinning, yoga, reading and walking her rescue hound dogs.
The Future of the Industry
“This is a resilient industry and I love it,” says Gruber, “After the great recession, we have bounced back stronger than ever and there is a lot of optimism right now. We always face potential changes to the status quo through changing regulation,” but Gruber says she tries to stay focused on the things she can control, such as doing a better job creating a value proposition for products. “We need to focus on getting the word out there about the value in our products and making sure they are compliant.”
One of the things she liked best about ultimate frisbee is that the players themselves referee it, even at the World Championship level, based on a code of conduct known as the “Spirit of the Game”. Gruber would like to see more self-regulation by the industry players who want to do the right thing. Until then, Gruber predicts that additional change is coming through increased regulation and though it may be hard, she thinks the end result will be good. “Ultimately, I think the industry will adapt and will be stronger for it.”
Her advice to someone new to the industry? “Find two mentors and reach across generations to do so. Find one who has industry experience well beyond your own and is a respected and known leader, and find another who can provide insight into a younger generation and the way they interact with technology.”
Gruber worked with the late Al Ranieri, founder and chairman of the board of American Auto Guardian, Inc. (AAGI), for seven years and refers to him fondly as one of her favorite mentors. “He was one of the people in this industry that no one had anything negative to say about. He was a class act and had genuine concern for his employees and customers. He was a true family man and he believed that you should always do the right thing - the right thing for your customers and the right thing for your employees.”
Ultimately, Gruber chalks up her success to working hard, being humble and being a good listener. “A mentor once told me, ‘You’re never as good as you think you are and you’re never as bad as you think you are.’ My motto is to listen and learn and not be afraid of change.”