Canadian Underwriter

Transitions in Collision Repair

November 30, 2007   by Laura Kupcis

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Training and development, the driving habits and attitudes of consumers, changing technology and customer service are all factors that will impact the way body shops continue to function and their relationships with insurers.

Body shops need to put more emphasis on training and development, warned David Lingham, who works in the collision repair industry in the UK and Europe and is the moderator of the International Body Shop Industry Symposium (IBIS).

He told the more than 350 delegates at the 10th annual CARSTAR conference held in Niagara Falls, Ont., that repairers in the UK do not fully understand the difference in technology and structure between different makes of vehicles and are therefore not repairing them correctly. It’s an accident waiting to happen, he said.

A campaign is being proposed in the UK in an effort to “get our house in order,” Lingham said.

If approved, part of the process would include a vehicle passport — a detailed log about the car — a system that is currently operational in Australia.

If someone is killed in an automobile accident and it turns out that a car was not repaired properly, under the UK proposal the repair shop will be held responsible. Penalty could range from a fine to jail time and the embarrassment of revealing to stakeholders, suppliers and customers that the shop is guilty of corporate manslaughter.

It’s a common belief in the UK that if mechanics are not in the shop because they are at off-site training, then money is being lost. In Germany, staff is constantly being sent out for training, but in the UK there is no emphasis on this, because the emphasis instead is on making money, Lingham said.

To add to the problem, repairers have not learned the word ‘no’ and are so focused on having a full garage that they end up losing control of the business and subsequently blaming insurers.

However, Lingham noted, insurers are willing to pay labour market rates, but will go to the person with the cheaper rate.

“Accept in life what you can’t change; take control of what you can,” Glenn Gibson, CEO, Crawford and Company International, said later on in the conference, adding that body shops can control the training and education.

Changes in driving habits

While the driving habits of consumers are not something that the body shops can control, they must be aware of the changes that are occurring and keep abreast of them.

Lingham pointed out that there are a number of reasons that driving habits are impacted including the environment and cost.

To drive into London, England, drivers must pay a charge. The mayor of London, Ken Livingstone, has suggested that cars with higher carbon dioxide emissions be charged more than those with lower ones — those who guzzle a lot of gas will have to pay $50 per day, while those with lower levels of carbon dioxide would drive in for free, Lingham said, adding that this would further impact people’s driving habits and the type of vehicle people drive.

“Legislation is going to make us more environmentally aware,” Lingham noted, adding that people will start to think about driving less frequently, which can lead to a reduction in the number of collisions. Not to mention, new materials and new bonding methods will be required to meet environmental regulations.

Advances in technology

Technology is another factor that impacts the way body shops operate today and in future. Lingham spoke of cars that will never have an accident (which means shops won’t be able to sell parts), cars that can speak to each other, cars that can signal the vehicle behind to warn of a rainstorm or disposable $3000 plastic cars created by Indian car manufacturer Tata.

But in all of this, Lingham noted, the industry is quick to forget the human — the focus is on the vehicle and not on the customer.

“(The) system isn’t human-friendly,” Lingham pointed out.

In the United Kingdom, the amount of insurance direct work is the lowest it’s ever been, while the retail market is the highest it’s ever been.

Customers are finding that it’s cheaper to pay for repairs themselves.

“Everybody owns the customer,” Lingham noted. “It’s what you do to lead the customer in.”

It’s about brand loyalty — knowing how to properly repair a vehicle, and knowing what the customer wants and needs. Managing customer expectations and reducing cost increases business, Lingham said.

The only way to derive what the customers want is asking: Are the attitudes of customers shifting? What are customers expecting from a service point of view? George Cooke, president and CEO, Dominion of Canada Insurance Co. said.

Gibson said he is seeing a downside of frequency that he’s never seen before. People are buying insurance and then fearful of using that product.

The industry needs to figure out how to make it easier for the customer to do business.

Further to the relationship with customers, is the relationship between insurers and body shops.

“Trust is the foundation of the insurance business as a whole,” Brian Duffy, manager, national claims services, TD Meloche Monnex Inc., said. ” With trust, as long as we are all on the same page . . . we do not need to micromanage our repair.”

Too many obstacles placed in the way, defeats the purpose of a relationship between insurers and body shops.

There needs to be a mutual trust and understanding of what we need to do for each other, Paul Hicks, assistant vice president, claims procurement, Aviva Canada, commented.

For Keith Hudd, manager, regional appraisers, inter-regional claims, The Economical Insurance Company, trust has to be earned and insurers have to be able to extend that trust.

While for Ken Boulton, program coordinator, auto and property, The Dominion of Canada General Insurance, unless the insurance company says something different, the body shop has the green light.

“If you fix it right the first time, everyone wins,” Duffy pointed out.

Both the insurance company and the body shop have ownership, Pasnyk said, and “if either of us drops the ball” customer satisfaction is lost.

“Client experience, especially at the shop level, is key,” Duffy said, adding that’s what makes a good repair shop.

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