Standardizing Programs

There are a myriad of direct repair programs (DRPs) to be found at collision repair shops, often one for every insurance company the shop works with, creating a number of difficulties at the shop level.

The rationale behind the numerous DRPs is competitive in nature, Ken Boulton, program coordinator for auto and property with Dominion of Canada General Insurance Company, told delegates at the Canadian Collision Industry Forum (CCIF) in Toronto. Insurance companies believe the differences within the programs set them apart from each other.

However, there might not be many differences between the programs.

In an attempt to start simplifying and standardizing the various programs, Boulton compared Dominion’s manual with that of The Economical. He quickly realized just how similar the programs were. When he compared sections of the manual in terms of how both insurers handled OLM and LKQ parts, the “number of similarities is just amazing,” Boulton said.

He had a meeting with Keith Hudd, manager of automobile appraisers for The Economical, and the two of them came up with some similarities and agreements in the programs. They created an amalgamated version of the two programs that would simplify procedures for collision repair shops.

The hope is that a number of other carriers will say they are interested in streamlining, and they will all discuss together how far it might go, delegates heard.

“It would be nice for us to find ways to make the process simpler at the shop level,” Boulton noted.

Shop stresses

Hudd has seen first-hand just how difficult the vast number of programs can be for front office staff in the shops.

“I watch the estimators in the front line and they’ve got 18 manuals above their head,” Hudd said. “One guy was doing an estimate the other day for The Economical when I was in the shop. Believe me, he actually grabbed an old Zurich manual and he was using that. I understand that type of confusion, and this is why we need to streamline.”

Insurance companies are notorious for downloading services to shops and the frequency of this is expected to increase. This means a different set of rules for every insurance company with which a collision repair shop deals with. That could translate into 15 to 18 different sets of rules, Hudd notes.

It is not even simply a matter of streamlining to make things easier, but a matter of economics as well, Hudd adds. With each and every staffing change or new hire, especially on the front end, training is required. Such training much touch on all the differing guidelines each insurance company has set out.

Shop owners are continuously trying to develop procedures, protocols and efficiencies in the shop that not only allow them to be profitable, but also allow them to maintain cycle times.

“When you are dealing with the customer, your insureds, we want to make sure that we come across as if we’re knowledgeable and we know the prod- uct so that the customer is at ease,” Marcelo Zunino, supervisor

of Fix Auto Brampton Central, said. Confusion and frustration is noticeable when staff try to write estimates, especially during the busy season, Marty Reddick, president of Supreme Collision Centres, said.

“One of the reasons I was pleased to be part of this panel [at the forum] was to try and standardize what it is that we [could] do that (might) eliminate the amount of time we waste in our facilities, and to really streamline the process,” Reddick said. “I find that by continually having to deal with 18 different sets of manuals, it’s a challenge for the people within our facilities. I am hoping good things will come of this and that insurers will team up with Ken and Keith (to) help standardize some of the processes which would make it a lot easier for all of us.”

However, amending programs and making changes is going to be a challenge, Martin Monteith, owner of Zenetec Collision Centre, said.

Boulton suggested an incremental approach to change. First, get a number of people enthusiastic about the project, then take a step back to analyze how to proceed, next revise a proposal from start to stem, and come back with a product.

Competitive crunch

One of the biggest challenges is the very competitive nature of the insurance industry.

“Every insurance company obviously thinks that they have the best program — best this, best that, best everything — when in reality they don’t,” Hudd said. Insurance companies look at their standards and guidelines as a competitive advantage — the insurance companies justify a lot of the differences as a competitive advantage.

“In reality, when you really sum this up and you really do an analysis on it, you’ll find that all insurance companies are doing is driving cost into the system. We’re guilty for that, and we need to clean that up. There’s no doubt about it,” Hudd noted.

The idea is to find a common thread that runs through all the varying DRPs that would satisfy all insurance companies. It is not about giving insurance companies or body shops an upper leg — it is simply about bringing the industry to a common place in which everybody is comfortable.

Shop owners are just looking for standardization to take place in order to eliminate some of the guesswork and be more productive, Reddick said.

“Times are tough,” Zunino said. “These are the days where shop owners are trying to survive, shops are trying to implement things that will allow them to be profitable in order that they may stick around for a while so we can service insurance customer. So anything we can do to get together to keep the production line going and keeping it in an assembly-line type of fashion. (So) you don’t have to stop to revise an estimate or explain to an insurance company why it’s been rejected . . . it’s a win-win for everybody — the shop, the insurance company and the customer.”