The excerpted article was written by JACKIE CHARNIGA
The market for service contracts — sometimes referred to as extended warranty products — is “highly-fragmented,” according to a statement from iA Financial Group CEO Denis Ricard. Opportunities for growth and consolidation are significant, he added.
IAS, of Austin, Texas, is the parent company of F&I vendor Innovative Aftermarket Systems, which sells vehicle warranties and other F&I products and related software to a network of more than 4,300 dealers nationwide. The company employs more than 600 people.
“We’re really a technology company that just happens to be in the F&I space. A lot of the work that we’re doing is using technology to try to improve either the experience or the throughput at dealership locations and be able to help consumers have a better experience,” he said.
Publicly traded iA Financial Group reported net income of $183.7 million Canadian in the third quarter, an increase of 11 percent year over year.
Dealers Assurance Co.is roughly half the size of IAS but boasts more dealership partners. It sold half a million F&I products last year, compared with 1.6 million sold by IAS, through more than 5,300 dealership partners, according to a report on the acquisition for iA investors. DAC collected $375 million in F&I product insurance premiums last year, while IAS took in $540 million.
DAC, of Dallas and Albuquerque, N.M., has 152 employees.
iA Financial Group purchased IAS from Genstar Capital, a San Francisco private equity group that has owned a majority share in IAS since 2011.