In advance of the forthcoming report of the Competition and Markets Authority on the state of the motor insurance market we briefly consider here the core elements of establishing a qualitative accident repair regime.
Suppliers of accident repair services are the ultimate arbiters of ‘quality’ repair production. Every year, from production lines scattered all over the country, millions of repairs are delivered back to largely unsuspecting and relatively ignorant customers. Even if insurers were to inspect every repair in the country (upwards of 4 million incidents) and somehow pronounce on their quality, this type of inspection regime is only tackling the aftermath and the symptoms of poor quality repairs and not necessarily the causes – where they exist.
The best inspection regime is one that never happens – because the repair is known in advance to be of the highest quality necessary. A regime where quality of outcome is an integral part of the process and the environment that leads inevitably and inexorably to the desired objectives for customers, insurers and the repairers themselves.
For this to happen we need a new and refreshed approach to generating a ‘quality repair’ in which all the stakeholders need to adapt and adjust their approach.
Choose the right partners.
The prevalence of e-auctions, written procurement tenders and a preference for solely cost-driven criteria militates against finding the right qualitative partners. How many insurers establish a rigorous and all-encompassing ‘quality test’ before they appoint repairers to their supply chain?
Pay enough (without subsidising inefficiency).
Any repairer worth their salt will seek to profit from their business and if the core rewards are insufficient then it is almost inevitable that standards will be allowed to slip. At the same time, repairers can be their own worst enemy by failing to manage their production processes effectively and efficiently.
Insurers and repairers alike need to be jointly seeking the ‘right’ answer to remuneration issues and not the lowest cost answer. New models of remuneration can also help to reduce insurer costs whilst maintaining quality output.
Higher quality of repair demands greater investment in equipment, people and skills. Suppliers should be differentially rewarded for producing higher quality results. That reward could, of course, be manifested in a great variety of ways (additional volume, longer contracts, membership purchasing schemes, management training) that would cost little or nothing to implement but would be of great value to the repairer.
Question the value of time saved bonus systems.
In a traditional bodyshop regime the productivity of the production process is measured by ‘time saved’ against the benchmark estimated hours for a repair. Quite often, productive personnel will receive a bonus based on this ‘time saved’.
Has there ever been a better way invented to almost guarantee that repairs will not be driven by a qualitative process as personnel quite naturally seek to finish the job in the quickest time possible regardless of quality?
Measure and manage workforce skills.
The ability to consistently produce a quality repair is ultimately dependent on the skill of the technician – always assuming they have the right working environment, equipment and rewards system. How are approved suppliers tackling the skill base questions? Those that are successful in this regard should surely be preferential candidates for supply chain approval.
Actions, not words
Insurers and other corporate clients of the repair sector consistently and rightly demand a quality output from their suppliers. For claimants the issue of a quality repair always scores the highest in any measure of customer demand. For the repairer, a quality repair that is ‘right first time’ will result in a lower cost base and greater profits.
Why then is the issue of quality in the repair sector even on the agenda if all the stakeholders have a positive motivation to do things right? There are those, of course, who care little for the quality of their output and it is the responsibility of insurers to seek out and destroy these miscreants (by removing or not granting approval).
However, in a sector beset by mistrust, misunderstanding and a lack of true commitment to the issue of quality repairs we can be sure that, so far, ‘words’ have outweighed ‘actions’ and we need a fundamental shift in thinking if we are to make true progress.