Premium profits increase
The panel beating business faces lean times while insurance companies cream record profits.
That’s the view of Motor Trade Association advocacy and training general manager Dougal Morrison.
Many panel beaters were struggling to survive, skilled workers were leaving the trade, recruitment was difficult because of low pay rates and repair standards were falling, he said.
‘‘ We’ve been seeing business owners closing their doors and walking away, rather than cutting dangerous corners,’’ he said.
Insurance Council of New Zealand figures show that companies collected a total of $1.3 billion in vehicle premiums last year, up $15 million on 2011.
They paid out $831m in claims, up $6.5m. All companies reported increased profits.
IAG, AA and Vero spokespeople did not comment on payments to panel beaters, but said repair quality assurance was a major focus.
The Wellingtonian spoke to one former panel beater who declined to be named for fear of his former company being blacklisted by insurance companies, which comprised 80 per cent of its business.
‘‘State pays $42 an hour. Out of that you have to pay your workers and everything else,’’ he said.
Panel beaters earned about $22 an hour, which compared badly with builders or plumbers, who had relatively low overheads, he said.
They had to provide a chassis machine, paint baking oven and other high- value equipment to carry out increasingly exacting repair processes.
‘‘I’ve found in the last two years it’s very hard to make money and if you take shortcuts, they bite you in the bum,’’ he said.
It left panel beating businesses trying to make money from retail customers who, he said, really should not be subsidising insurance companies.
Panel beating apprenticeship numbers were down 10 per cent in 2011 compared to 2008, and spray painters fell 30 per cent.
One Hutt Valley panel beating and spray painting business was liquidated this year.
Insurance Council of New Zealand insurance manager John Lucas said there were quite likely too many collision repairers in the market place. New cars were more complex, he said.
‘‘ We disagree, though, that there are substandard repairs being done where an insurance company is involved.’’
Assessors view damaged vehicles, agree what needs to be done and a price with the repairer, and finally check the completed work.
Another panel beater, who also declined to be named, said that was no longer true.
Insurance assessors did their work from their desktop, using digital photographs and measurements taken by panel beaters.
The three IAG companies – State, AMI and NZI – paid $46 an hour for work, but that included all consumable materials, such as filler and sandpaper.
‘‘ We are barely covering our costs,’’ the second panel beater said.
It made it difficult to attract and retain competent tradespeople.
‘‘In Australia they are offering better money, better working conditions, all that stuff. We’re losing tradesmen, not only overseas but out of the industry.’’
He said there was no pressure to cut corners in terms of quality.
‘‘ We’re dealing with people’s lives because if they [vehicles] are not right we’re putting deathtraps on the road.’’
However, the cost of insurance had driven part of the business underground, he said.
Vehicle insurance is an increasingly profitable business.