A reinsurance program is built one contract at a time, and every one of them has costs sitting on top of it before a dollar reaches the reserve. Enter the economics of a single contract and see where the premium goes: administration, ceding, the ancillary pieces bundled into it, agency commission, expected claims, and what is left. Nothing is sent anywhere and nothing is stored.
The amount collected is not automatically dealer money. This shows where it may go before any underwriting result develops.
Remaining for reserve participation: $252, 21% of premium.
The premium a customer pays for one contract. Must be greater than $0.
Flat administration cost for one contract.
4%
0%15%
The share of premium retained for risk transfer.
Flat Clip cost per contract.
Flat roadside assistance cost per contract.
Commission paid to the agency on the contract.
50%
0%100%
The share of premium expected to be used for claims.
Starting values are an editable example, not industry averages. Change any field to see the allocation update. Nothing on this page is sent anywhere.
Contract allocation overview
The share of the total contract premium.
$1,200
Total contract premium
Follow the premium
From the premium collected to the amount remaining for reserve participation.
$0$1,200 premium
Ceding fee
Risk transfer, insurance support, and applicable compliance costs
4%
$48
Administration
Contract processing, claims administration, technology, and reporting
13%
$150
Clip
Illustrated Clip cost included in the contract
2%
$25
Roadside assistance
Illustrated roadside assistance cost included in the contract
2%
$25
Agency commission
Commission paid to the agency on the contract
8%
$100
Expected claims
The estimated cost of providing the coverage purchased by customers
50%
$600
Remaining for reserve participation
What is left after the illustrated fees and expected claims. It may support reserves, underwriting results, and investment activity depending on the program.
21%
$252
What this contract shows
Of the $1,200 premium entered, $348 goes to program fees, $600 is assigned to expected claims, and $252 remains for reserve participation. That remaining amount is still subject to actual claims development, cancellations, reserve requirements, taxes, professional expenses and other program-specific costs. It is not automatically profit or distributable cash.
Now multiply it by your book
A per-contract difference is a rounding error on one deal and the whole argument across a book. At 40 contracts a month over a five year writing period, every $25 of per-contract cost is $60,000 of premium that either does or does not reach the reinsurance company — before any underwriting result develops on it. The performance estimator runs exactly that, your current structure next to what we would place.
Fees affect every contract
Small per-contract differences become significant across hundreds or thousands of contracts.
Claims provide customer value
Claims are not simply a cost to avoid. They represent the protection the customer purchased.
The remaining amount still carries obligations
Reserve participation does not mean the money is immediately earned, available, or distributable.
Claims are shown as a cost because they are paid out, but they represent the coverage your customer bought, which is a good thing. The amount remaining after fees and claims is what may support the reserve you participate in over time; it is not a guaranteed or immediately distributable result. Actual fees, claims, reserve requirements and accounting methods vary by program. This tool is educational, is not tax, legal, or accounting advice, and does not estimate returns.
The most common misreading of a reinsurance program is treating written premium as the number that matters. It is not. What reaches the reinsurance company is premium minus the costs layered on top of it, and what the dealer ultimately participates in is that figure minus claims, minus reserve requirements, minus taxes and program expenses, developed over years rather than realised at delivery.
Seeing it on one contract makes the structure legible. Seeing it across a book makes it consequential: the per-contract costs are the same on contract one and contract two thousand, so a difference that looks trivial on this page is the difference between two programs over a writing period. That is what the performance estimator puts side by side, and what the transparency worksheet helps you pull out of a statement you already have.
FAQ
Frequently asked questions.
What does the contract breakdown show?
How a single F&I contract’s premium divides among the costs that sit on top of it — administration, ceding, ancillary inclusions, agency commission — and expected claims, leaving the amount that may support reserve participation. It is an editable illustration, not a quote. Enter your own figures and the allocation updates.
Is the amount remaining the same thing as profit?
No. The remaining amount is what may support reserves, underwriting results and investment activity, depending on the program. It is still subject to actual claims development, cancellations, reserve requirements, premium tax, professional expenses and other program-specific costs. It is not automatically profit and it is not immediately distributable cash.
Why are expected claims shown as a cost?
Because they are paid out of the premium. But claims are not simply a cost to avoid — they are the protection the customer purchased, and a program with no claims is usually a product that is not being used. What matters is whether the claims experience is in line with how the product was priced.
Why does this matter across a whole book?
Because small per-contract differences compound. A $75 difference in the administration fee on one contract is a rounding error. On 40 contracts a month across a five year writing period it is $180,000 of premium that either does or does not reach the reinsurance company, before any underwriting result develops on it.
Can the remainder be negative?
Yes, and this tool shows it rather than rounding it up to zero. If the illustrated fees and expected claims exceed the premium, the contract shows a negative underwriting result before any claims development. That is not necessarily wrong for a single contract, but it is exactly the kind of result worth understanding across a whole book.
