Insurers address issues from DRP shop management to anti-steering regs at NACE
Detroit—Among the most popular events of NACE since it premiered in 2011, the half-day MSO Symposium is focused on the needs of multi-shop operators (MSOs), as well as those who aspire to become one.
At this summer’s NACE in Detroit, the symposium offered six panel discussions, several of which included insurance company representatives whose perspectives and ideas would be of interest to anyone in the collision repair industry.
During one such discussion, insurers were asked what they will do if they know that a customer’s chosen shop is not equipped or certified to properly repair the type of vehicle or damage involved in a claim. Will they push that customer to choose a different shop?
Clint Marlow, one of two auto claims directors at Allstate Insurance, said he thinks they should, though he admitted that might lead to difficulties involving anti-steering regulations. Marlow said that such situations — in which the chosen shop may not even have access to purchase the structural parts needed, because of automaker restrictions — present a “moral dilemma” for insurers trying to honor customer choice and follow anti-steering regulations.
“At the same time, you’re thinking, ‘I’m really not feeling great about this repair facility’s ability to fix this Cadillac CT6 or this Ford F-150,’” Marlow said.
Allstate hasn’t worked out the details out yet, he said, but will “take the high ground” by “educating the consumer” in such cases.
“So we’re not going to go as far as saying, ‘You need to take your car to a particular shop,’ but we are going to have a discussion around the uniqueness of their vehicle, some special repair techniques that may apply, and some questions that we feel strongly they need to ask their repair facility,” he said.
Asked if that could be perceived by some as steering, Marlow acknowledged that “we’re going to bounce up against some regulators.”
What’s working, what’s not
Insurer representatives on one panel were asked what they see as working within their direct repair program, and what’s not. Danny Henderson, auto claims director at American Family Insurance, said his company sees better cycle time, customer satisfaction, and repair quality coming out of its direct repair program shops. One of the challenges, he said, is finding the right balance between overseeing those shops and letting them “self-manage.”
“We all have a lot of data that can predict outcomes and give oversight and an understanding of how a shop is performing rather than having our staff oversee individual shops,” Henderson said. “I think that’s where we need to strike a balance of what is most cost-effective for the insurer to manage the DRP process.”
Allstate’s Marlow said his company has seen growing customer interest in using Allstate’s DRP.
“Like it or not, our lives have become more and more complex,” he said. “People just don’t want the hassle. We see more and more people just wanting us to take care of the problem for them.”
He said Allstate continues to see a need for a variety of shops — MSOs, single-location independents, and dealership shops — on its program.
“With regard to what’s not working, I think we would generally agree as a group that we are not leveraging technology and data to the fullest benefit. Nowhere near it,” Marlow said. “I think scheduling has been a challenge, particularly for some of our repair facility partners. You might not get any assignments from us today and 12 tomorrow and then 12 the next day and then back to none. That’s extremely difficult for you guys. We know that.”
Chris Andreoli, repairer network process director at Progressive Insurance, agreed that scheduling is an issue within his company’s DRP.
“That’s more of a ‘we’ problem than a ‘you’ problem,” Andreoli told repairers at the event. “We certainly cause those issues, the old ‘in on Monday, out on Friday,’ rather than just getting things level. That’s definitely something that could be worked on.”
But he said cycle time and customer retention have improved within his company’s DRP.
“Nationally, in our service center program, we see quality-inspection rejects below 5 percent, and on-time delivery is phenomenal, over 91 percent year to date,” Andreoli said.
During one panel discussion, repairers acknowledged that significant diversity in administrative processes and other requirements of direct repair programs creates tremendous inefficiencies for shops.
Allstate’s Marlow said there is likely room for some standardization among insurers, perhaps related to required photos and calculations of rental duration.
“I think it’s reasonable to expect that there are going to be some differences, whether it be within the repair facility or the insurance company, each looking to have its own special sauce,” Marlow said. “Maybe the answer is to not try to be partners with all 15 to 20 of us, and try to find who are the four that you’re going to partner with, so you don’t have 20 different programs to manage.”
Another panelist, Jim Keller of the 1Collision Network, said that strategy can be more challenging for shops in smaller markets that tend to have a lot of DRPs because the volume from any one of them isn’t sufficient.
Marlow offered several other insights into possible directions Allstate may be headed. He said, for example, that information about an accident gleaned from the vehicle’s own systems, coupled with historic claims data, could potentially reduce the need for the traditional estimating process.
“How many Ford F-150s that are hit in the left front with a certain velocity do we need to fix before we can get to a decent confidence level to predict that loss cost up front, and allow you guys to do what you do best: fix the car,” Marlow said. “There are advantages to both shops and repairers. It’s not going to be for every car. But we think the industry is primed to move in that direction.”
Automakers are clearly gearing up to use vehicle telematics and their collision shop networks to take an increased role in helping the consumer, even at the scene of the accident, and arrange for the towing and collision repair work they need. Whether as part of that process or in order to combat it, Marlow suggested consumers may want to make some decisions in advance of the traumatic experience of a collision.
“We’re starting to think about it as a ‘living will’ for your car,” he said, comparing it to the directives people create to spell out what type of medical treatment they may or may not want if others at some point are making those decisions for them. “Let’s have a conversation about what you want if something happens to your vehicle. Where do you want to get it fixed? Who do you want to tow your car? Will you need alternate transportation? You start thinking about how different that claims experience could look.”