Seemingly conceding that its previous position on estimating system data was untenable, ADP announced in April it was putting on hold its plan to encrypt that data and make it unusable by unlicensed third parties such as Internet claims management companies. 

The ADP announcement in late 2000 that it was protecting its rights by encrypting the output files of its estimating systems created an uproar in the industry, both from collision repairers and insurance companies.

At the Collision Industry Conference (CIC) held in Minneapolis, ADP announced the reversal of its plan. Over the previous five months, Rick Tuuri, director of industry relations for ADP, had defended his company's right to encrypt data, saying it was necessary to protect proprietary information, both its own and that licensed from third parties such as OEMs that provide vehicle parts numbers and pricing data.

Critics, however, had called it an unfair restriction on ADP customers' ability to transmit estimate and claims data over the internet rather than only through ADP's network. They charged that encryption plans were more an effort to stave off competition rather than a data privacy issue.

At CIC in April, however, Tuuri said ADP is putting encryption plans on hold. "Although ADP takes the issue of data security and privacy very seriously, we also recognize that the industry is still working on all of the issues related to implementing and managing secure transactions over the internet," Tuuri said in a prepared statement. "Therefore, ADP has no plans to encrypt output files and will not take measures regarding this issue until the appropriate standards and policies are created, or unless it is deemed necessary by clients, business partners or government regulations."

CCC endorses open systems

CCC Information Systems announced that it, too, would enable its customers to use Internet-based communication services to transmit estimate data from their CCC systems.

"We are pleased to announce that CCC will work with all Pathways Estimating Solution customers to turn on the EMS extract on request, so that they may work with third parties of their choice," said CCC's Jim Dickens, who added, "CCC will take appropriate action to safeguard all estimate interests in the EMS data."

CCC had never formally announced that it would encrypt or otherwise turn off the EMS extract file, but industry media had reported that several customers had trouble getting the company to turn on the extract file feature.

The EMS extract is a data file standard developed by CIECA, an industry group established to develop standards for the electronic exchange of information.

Mitchell welcomes announcement

Mitchell International, which had been the sole voice among the `Big-Three' information providers to endorse open communication of estimate data, applauded the ADP and CCC decisions.

"We support open systems very ardently," Paul Gange, Mitchell's vice president of product management, said at the CIC meeting. "We want to compete on the merit of our product and on the merit of our service offerings and allow you (repair shops) to be able to responsibly use the data from an estimate you created."

"We have always strongly supported open communication of estimate data," said Mitchell CEO Jim Lindner in a press release. "We believe it is the best interest of the entire industry because it promotes open competition and the ability to share information between shops and insurers - which is so critical in our industry.

Supporters of "open systems" say the ability to exchange information via the internet will allow greater competition by giving shops and insurers more options as to how they communicate electronically. Under open systems, for example, a shop may not be required to use a particular estimating system in order to exchange assignments and estimates with a particular insurer.

Consolidators, insurers meet

Also at CIC, Rollie Benjamin of the Minnesota-based ABRA Autobody and Glass, a consolidator with about 70 shops, said that representatives of several consolidators and 10 insurers met in March in Las Vegas to discuss the need to simplify administrative processes in shops.

Media reports indicate that the consolidators included ABRA, CTA, Gerber, M2, Sterling and True2Form. Noticeably absent was Caliber Collision, the largest operator in California and Texas. Caliber's CEO, Bill Lawrence, told Hammer & Dolly magazine that "we prefer to address client issues one on one." Insurers included Allstate, GEICO, Nationwide, Progressive, Safeco, State Farm, Travelers, USAA and several others.

Benjamin said that the discussion at the meeting - such as the expense of having to have multiple estimating systems to meet insurer direct repair programs - will benefit all repairers, not just consolidators. Independent shops at CIC voiced interest in participating at such meetings, including one planned for August; Benjamin said the request was noted but said he views the meetings as another avenue to push forward some of the same issues CIC committees are working on.

Shops doing more admin work

CIC's new "Operations Committee," for example, announced at the April meeting that it is compiling a summary of the various claims administrative processes shops perform for insurers. Tom Moreland, co-chairman of the committee, said the summary will be a step toward analyzing to what degree differences in insurer administrative processes lead to higher costs, and also may help lead to more standardization among insurers.

In a related discussion, Rod Enlow of USAA said he recognizes that insurer direct repair programs are shifting some of the claims processing costs from the insurer to the shop, and that shops should be compensated for those added costs.

"If this task transfer is a burden to you and you're not able to find some way to recoup that expense, then it's no longer a good relationship," said Enlow, director of auto industry affairs for USAA. "It's a cost that we cannot continue to hide in the estimate. I don't want to see it in the frame time. I don't want to see it in the refinish time. We either need to have it in the door rate or we need to have it as a line item. The costs have got to be somewhere because they're real."

Enlow said he would prefer to see such added costs reflected in "a realistic door rate" rather than a line item, so the estimate is more clearly just an assessment of what needs to be done to repair the vehicle.