Zurich acquires service contract app company

Editor’s note: Photo captions in earlier versions of this story incorrectly identified Josh Gale’s employer and his role at the time of the story’s publication. He was a vehicle exchange/vehicle protection specialist with Pine Belt Enterprises.

Zurich North America has acquired an applications company after piloting the technology to help sell service contracts in dealership service departments.

With the acquisition of the 3-year-old startup, Sea Pine Technologies of Dallas, Zurich will have significant input in the development of future applications and enhancements, and can exclusively offer the program to dealers, according to Marie Knight, head of Zurich's direct markets strategic services.

Zurich, a global insurance company and a major provider of F&I products and training services to U.S. auto dealers, did not disclose financial terms of the acquisition.

Zurich approached the tech company last year about its Service Lane VSC app for dealership personnel, which can be downloaded for free from Apple's App Store onto an iPad.

The app captures customer information and pulls up the service plans a vehicle is eligible for. If a customer decides to purchase a service contract on the spot, it can capture the customer's credit card information.

Dealership employees can also generate and send pricing quotes, brochures and videos through the app.

Three dealerships piloted the program starting in the third quarter of 2018. Knight said the three were not generating service contract sales of any significance prior to the program.

"There was no process, no system and no technology to support it prior to launching the pilot in their dealership," Knight said. "The feedback we received was if everything was implemented as suggested by Zurich, they had immediate and sustainable results."

Selling service contracts in the service department recaptures lost revenue from the F&I office, and gives the dealership a chance to sell products to service customers who did not purchase vehicles at the store, according to Rob Sickel, vice president of Pine Belt Enterprises in Lakewood, N.J., which sells Chevrolet, Chrysler, Jeep, Dodge, Ram and Subaru vehicles.

Pine Belt's Chevrolet store, which piloted the program, has the geographic disadvantage of being separated from its service department by a highway.

"If we did have a customer that was interested in an extended service contract, we'd have to send them across the highway to a finance person who may or may not be available if they're with a customer," Sickel said. "Just being able to handle it right there in the drive, or in the waiting room, so the customer can be on their way, makes it easier for everyone."

The store's service department, which can handle between 60 and 80 vehicles a day, is now selling roughly 20 policies a month through the Service Lane VSC app.

Through the program, a designated employee handles the sales contract so the other advisors are free to manage regular service work. Selling warranties in the department had previously been an afterthought, Sickel said.

"We've been in business for 82 years and have been unsuccessful in selling warranties in our service department until this program," Sickel said.

The group sells about 600 new and used vehicles per month.