Retro News: July 1996, 2001, 2006, 2011
Written by John Yoswick, Autobody News
Published June 27, 2016
20 years ago in the collision repair industry (July 1996)
Erick Bickett sees two possible scenarios for the future of electronic claims handling.
Bickett, a California shop owner whose name has become synonymous with the effort to standardize how shops and insurers link their computer systems, explained the two scenarios to those attending the Collision Industry Conference (CIC) in Phoenix in July.
In the first scenario, he said, insurers increasingly dictate which computerized estimating system that shops participating in its direct repair program (DRP) must use. To participate in multiple DRPs, shops will likely have to have two or even all three of the major estimating systems. Once the insurer chooses a system it will be difficult for that insurer to switch because that would also require the whole group of shops to switch. This lack of choice stifles improvements in the computerized systems, and prices escalate.
In the second scenario, the insurer uses the “network” of its choice to electronically send a standardized “assignment” to the shop. The shop uses its choice of estimating system, and uses the “network” of its choice to electronically send a standardized estimate to the insurer. Either side can switch estimating or network vendors based on price and performance without interfering with their communication.
Unfortunately, Bickett said, the industry seems headed more toward the first scenario than the second, but he hopes a demonstration of the second system now under way may help create the “market forces” needed to change the industry’s direction.
Bickett estimates the cost of running all three estimating systems at about $18,600 a year for hardware, software and training; at a 7 percent pre-tax net profit, Bickett said, a shop would need $265,000 in sales just to cover these estimating system costs. That, he said, is going to drive even more shops out of the industry.
“I think technology should be an enabler,” Bickett said. “It ought to enable people to do business better and more efficiently and to take better care of their customer. It shouldn’t be a disabler. It shouldn’t cause the loss of good collision repairers who know how to fix cars and take care of customers.”
Bickett said that under the second scenario, a shop’s annual estimating system costs would be about $6,500, and that the system would save insurers money as well. Most importantly, he said, it would give both sides more choice as to the systems and communication networks they use.
State Farm Insurance and two collision repair shops are currently participating in a demonstration of this system, and Bickett said a report on the project should be completed later this year.
– As reported in The Golden Eagle. Bickett has continued to champion the use of electronic communication standards developed by CIECA, the Collision Industry Electronic Commerce Association, which was established based on the work and discussions at CIC. State Farm remains one of the few insurers to allow its DRP network to use the estimating system of their choice; a 2016 survey found that more than one-third of shops have multiple estimating systems.
15 years ago in the collision repair industry (July 2001)
By eliminating vehicle owners’ contact with shops, Progressive’s “Concierge” program may reduce the hassle for car owners, but it also eliminates any long-term marketing benefit for the repairers. Shops that pare of “Concierge” now truly have Progressive as their customer, not the vehicle owner. If Progressive is satisfied with the quality and the cost, the shops will continue to receive referrals.
The vast majority of vehicle owners who opt for the “Concierge” program will not know which repair facility fixed their vehicle. Will they care? Progressive obviously believes not. The insurer holds that the higher level of hassle-free service far outweighs vehicle owners’ concerns regarding who actually performs the repairs. If vehicle owners really want to know who repaired their cars, Progressive will tell them, but Progressive prefers to handle the entire process, to serve as the facilitator.
In talking with shops participating in the “Concierge” test program, most have state little concern regarding the loss of customer contact and are highly satisfied with the program. Keeping their repair facilities filled is their most important concern. But this attitude is strikingly short-sighted. Ever shops with numerous direct repair program relationships and outstanding insurance company relationships keep a firm eye on individual vehicle owner satisfaction and communication for the long-term benefit for their businesses.
Those who love Progressive generally cite the local claims manager as the reason. If this local insurance representative is reassigned, with the repairer be able to maintain their relationship with Progressive? Will they want to? If not, they could lose the “Concierge” referrals with no opportunity to secure a repeat customers from their prior work.
– from an editorial by Russell Thrall, at that time the editor of Auto Body Repair News (ABRN).
10 years ago in the collision repair industry (July 2006)
During the 1980s and 1990s, association and seminar leaders frequently pointed to changes in vehicle technology that were putting a dent in the collision repair market. Daytime running lights, the third brake light and anti-lock braking systems, they’d say, were among the key factors pulling accident frequency down.
The industry then got a sort of reprieve for a number of years in terms of crash-prevention efforts. Automakers turned their focus largely to vehicle safety and occupant protection, including the explosive growth of airbag systems. The Internet boom also had the OEMs and eletronics firms focused on passenger information and entertainment systems.
The bad news for the industry is that that is about to change – and change rather dramatically. Federal auto safety regulators – seeking to reverse a rise in highway deaths – are shifting their focus from mandates that help occupants survive crashes to technology that will help drivers avoid accidents altogether.
Dr. Jeffrey Runge, administrator of the National Highway Traffic Safety Administration, said in a speech before the Society of Automotive Engineers that bolstering vehicle "crashworthiness" represents the past, and that "crash avoidance" is the future.
“I’d like to begin to focus on the event before the crash,” Runge said. "We may have plateaued out in terms of crashworthiness.”
– as reported in Autobody News, July 2016.
5 years ago in the collision repair industry (July 2011)
Allstate has notified its direct repair shops in recent weeks that participation in the program now requires three specific mandates designed to improve cycle time and give Allstate customers “priority service.” “Good Hands” shops now must upload an estimate to Allstate within 24 hours of receipt of the vehicle, provide the customer with a guaranteed delivery date and assume all costs after that date if not met, and extend hours of operation to meet customers’ reasonable requests for drop-off or pick-up of vehicles.
"Compliance with these items remains a core requirement for your participation in Allstate's direct repair program,” Tracy Tramm, Allstate claim service manager, said in a video to Allstate DRP shops.
Last week, Allstate Corporation also announced that Joseph Lacher, president of the company’s residential and auto insurance business, was leaving the company effective immediately; no reason was given for his departure, just two years after he joined Allstate. The company has seen its auto insurance market share erode in 2009 and 2010 as GEICO and Progressive have gained ground on Allstate.
– As reported in CRASH Network (www.CrashNetwork.com), July 25, 2011. Allstate’s market share has continued to decline, with Geico passing Allstate in 2013 to become the second-largest auto insurer in the country. Progressive has gained ground on Allstate but still trails slightly in terms of market share. A month after Lacher left Allstate, the Wall Street Journal reported that his departure may have been prompted by a decline in the insurer’s stock value, but also that he reportedly used less-than-flattering expletives in describing Allstate CEO Tom Wilson while having drinks with some top Allstate agents after a meeting in the weeks before his departure. Lacher last fall became CEO of Kemper Corp.