Give some thoughtful people who are knowledgeable about the collision repair industry a chance to shine up a crystal ball and look into the future, and you're likely to hear some interesting things. 

Risley

"I think we might see someone pilot a program where participating collision repair facilities will be given a standard flat fee to repair vehicles regardless of the amount of damage," said Dan Risley, executive director of the Society of Collision Repair Specialists (SCRS) when asked to look at where the industry might be in five or 10 years.

"The thought behind that is that it would simplify the repair process, reduce cycle time and reduce overall claims costs. For example, the repair facility wouldn't have to spend the time and resources writing and submitting supplements and waiting for approvals."

Risley was one of three observers of the industry asked recently to talk about what they see in the future in terms of shop and insurer relations. Here's what else he and his colleagues had to say.

More insurer-owned shops?

Brian Sullivan doesn't believe more insurers will follow Allstate's lead into ownership of collision repair facilities. Sullivan, the editor of the weekly Auto Insurance Report, said he believes Allstate is benefitting from its ownership of the Sterling Autobody Centers, but not for the reasons many shops assume.

"It costs them the same to fix a car as anyone else," Sullivan said. "They can't buy fenders for less or pay less for labor than other shops. The difference is there are zero 'friction costs.' The Sterling shop just fixes the car. They have no incentive to puff up the repair costs, and the insurance company has no incentive to try to squeeze a few dollars out. They just fix the darn car. When I talk to senior Allstate execs, they say that taking the friction out of the process is the single greatest benefit to an insurer owning its own shops."

That said, Sullivan sees no other insurer planning to own shops. "But taking friction out is really what they all want to do," he said.

To do so, Sullivan believes, certainly five years from now - and maybe even 10 - insurers will continue to use various models of DRP structures: larger networks with lots of capacity, smaller networks with stricter requirements, concierge-type programs, and even programs putting insurer personnel in shops.

"At this juncture there is no clear model that has emerged as the answer," Sullivan said. "If I had to say what will happen in five years, my answer is that there will still be a range of solutions. Companies will be doing the things that work best for them and trying new ideas. I just don't see on the horizon the big 'aha' that is going to swallow up the way we do business today."

For his part, Russell Thrall III, founder and publisher of CollisionWeek.com, believes that more insurers in the next five years will move toward smaller provider networks, "concentrating work toward fewer, hopefully better-performing repair facilities based upon performance goals the insurer sets and measures." Thrall, who grew up in his family's collision repair business, is technical services manager for the I-CAR Education Foundation. He also predicts that within 10 years, technology will halt the "down-sizing" of insurer shop networks.

"Technology will make the benefits of limited referral arrangements largely obsolete," Thrall said. "Over time, a common set of financial and non-financial performance measures will be used by a larger group of insurers and repair facilities. Tracking these measures and communicating electronically will increase productivity on both sides of the transaction. For an insurer, why limit that increased efficiency to just a small number of DRP facilities?"