Pre­mium prof­its in­crease

Kapi-Mana News - - NEWS - By JIM CHIPP

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.

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