Fix Auto - Index

Fix Auto - Magazine02-en - Index

In the Us, as elsewhere,
InsUrers are battlIng
harder than ever
for Market share
HOW INSURERS ARE cOMpETINg WITH
ONE OTHER?
With record high profits coming from lower
frequency, insurers are now able to lower
premiums and invest more in marketing
and advertising.
That has serious implications for the collision
industry.
WHAT IT MEANS FOR BODy SHOpS?
First, insurers have never before had such
efficient tools for measuring and controlling
the performance and processes of repairers
as they do today.
With the data provided by new technology,
insurers can keep forcing repairers to optimize
their operating methods.
Second, the steady decline of frequency in past
years has led to over-capacity. Since there are
too many shops, insurers can pick and choose
which ones they want to do business with.
WHAT IS THE REAcTION?
Some shops are getting frustrated and appealing
to their local associations. Others are
evaluating their profitability based on the
new requirements and saying no to insurers.
And some are still wondering what to do...
cAN I DO IT BETTER AND cHEApER?
One thing’s for sure, the old model is broken.
Customers will no longer pay for mistakes
and inefficiencies.
WHAT IS THE SOLUTION?
Many shops are surviving simply because their
overhead is low. They own the real estate and
their equipment is paid for, but year after year,
increased pressure on margin and additional
discounts are eating away at their remaining
profits.
There will come a day when an artificially low
overhead will no longer sustain the business
model under these pressure conditions.
The owners of these shops spend their day in
the business and have no time to work on the
business developing strategies to adjust and
improve their operations.
When reality catches up, they might have to
close, or sell for asset value, while a select few
may get help in adjusting their operational
strategy to meet the demands of the new
business model.
Some believe this is all just a cycle and that
frequency will return, that demand will meet
or exceed supply, and that the market will
regain its former vigor.
DO yOU BELIEVE IT?
Today we have safer cars, better road technology,
tougher legislation for new drivers, better
collision technology, safer drivers, etc.
So I see fewer repairs ahead and therefore
less margin to go around.
I believe that what is paramount now is the
need to improve operating methods and
lower our costs to deal with the pressure from
our customers, the insurers.
They want to have their way and they should
have it. They are our customers and they buy
our services. They have the right to demand
better quality and better services. But they
need to do it in a responsible way. There
needs to be a balance.
THAT’S WHAT FIx AUTO IS ALL ABOUT.
Erick Bickett
MARK MAGAZINE || 27