IN­SUR­ERS PANEL BEAT RE­PAIR­ERS

Finweek English Edition - - Letters - RICHARD GREEN

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?

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