INSURERS PANEL BEAT REPAIRERS
YOUR REPORT – especially the parts that refer to the claims by insurers of the rising costs of repairs to collision damaged vehicles ( Finweek, 15 March) – made me reach for my “pen”. The only channel for those insurers to have insured vehicles repaired is the Motor Body Repairers’ in South Africa, most of whom belong to Sambra (South African Motor Bodies Repairers’ Association).
The “real” income to Sambra members – made up of labour charges, parts margins, paint labour charges and product margins – has dropped over the past five years purely due to the dominant manner in which short-term insurers “manage” their spend. That’s achieved by “steering” work to their chosen panel of repairers and squeezing those repairers for the best possible terms.
In addition, as is the case with the “go direct” insurer mentioned in your report, the insurer demands an “invoice settlement discount” of 10%, which is off the gross invoice value.
A number of insurers also force the use of second-hand and “generic” parts when authorising repairs and in many instances the vehicles are less than a year old.
In addition, almost all insurers use a costing system called Audatex. This system is used to manipulate the repairer’s original quote downwards and (in the case of smaller repairers) the appointed assessor will threaten removal of the repair unless the repairer accepts the manipulated quotation.
If the aforementioned is correct – which it is – and there’s a 10% downward influence exerted due to the reduction in the capital value of the car, where are the savings to premiums?