Canadian Collision Industry Forum speakers urge insurers to reduce complexity of auto claims

Insurance carriers in Canada should avoid getting in the collision repair business and should come up with a standard for handling auto collision repair claims, speakers at the recent Canadian Collision Industry Forum (CCIF) suggested.

Doug Kirk, global services support manager at Amsterdam-based paint and performance coating maker Akzo Nobel, noted that he has talked at previous CCIF meetings about insurance carriers owning body shops.

“I suggested to insurers in the audience, ‘Don’t do it.'” he said during a presentation at this year’s CCIF in Toronto. “It’s a great thought process, and I can talk about this all day long, but greed gets the better of almost everyone.”

During a panel discussion at CCIF, several members of the CCIF steering committee commented on Kirk’s earlier remarks.

“Currently we are not in the market to become collision repairers,” said Joe Carvalho, manager of national auto appraisal, claims for Economical Insurance, and a CCIF steering committee member. “We are an insurance company. Having said that, if there was a supply and demand issue where we could not get our clients’ cars repaired, I would assume that you could easily align yourself with the right person, and have them run a collision facility for you. That’s not the ideal goal. The ideal goal is to let the collision industry thrive and be profitable. We sell insurance and you guys deliver that promise. That’s the best goal.”

CCIF is intended as a volunteer body for collision industry stakeholders, including collision repairers, suppliers, insurers, associations, original equipment manufacturers and educators. It holds CCIF meetings three times per year. The most recent meeting was held Feb. 1 at the Toronto Airport Marriott.

During that meeting, Kirk asked whether the claims process for collision repairs is too complex.

“There are extreme levels of complexity that are put in there and sometimes they create a level of conflict,” he said.

“There are a lot of different individual platforms on estimating and allowances,” said CCIF steering committee member Paul Prochilo, owner of Prochilo Brothers Auto Collision. “If as an industry could get together, with some input from (original equipment manufacturers) and collision repairers, and standardize a procedure … that would allow consistency with every single estimate, we would eliminate a lot of non-value-added costs in the process.

“We’re talking about the non-value-add that is happening in the estimating process, something that is defined as what the client would not pay for. And it’s taking a lot more hours per (repair order) to be able to effectively expedite and execute these repairs with these different standards across the board. If you had only one, you would see costs in the administration level drop tremendously.”

CCIF steering committee member Bruce Hemstreet, who owns one CARSTAR Automotive Canada Inc. location in Lethbridge, Alta. and another in Medicine Hat, suggested that in general, the claims process is complex.

“Economical, from our perspective, has taken leadership in eliminating all the crap that comes to dealing with a claim today,” he said. “A couple of the other insurers have adopted at least some components of that but there are still way too many that have layers and layers of protocol, extra steps that really aren’t needed. The fact that they seem to pride themselves on being different from one another is very confusing for appraisal staff.”

Carvalho suggested Economical is trying to reduce complexity in auto claims.

“The belief is, if you’re going to align yourself with somebody and you’re in a relationship, you trust them,” Carvalho said. “They are the best people to repair the car. They know the process. We know insurance. You folks know how to fix cars. We step out of your way. Your do what you do best every day. That includes handling the rental process, that includes ordering parts, the right part for the right repair, and so forth. You bill when you are done and we kind of monitor the back end.”