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September 20, 2018

Insurance Outlook

Insurance Outlook

The insurance landscape is shifting quickly for collision repair facilities with vehicle technology, repair standards, performance requirements and customer service expectations re-shaping the future. Over the past month, CARSTAR’s insurance team has met with insurance carriers and franchise partners at both Momentum 2018, the North American CARSTAR conference, as well as NACE Automechanika to discuss how repair facilities need to prepare for this evolution.

CARSTAR sees more than 90 percent of its repair business come through insurance claims, and over 90 percent of CARSTAR stores participate in at least one Performance Based Agreement (PBA). CARSTAR has a unique perspective on the changes ahead because of its business model. Key trends on the CARSTAR horizon include:

 

    • OEM Repair Standards – More and more, OEMs are driving the repair standards for vehicles. This creates an opportunity for the insurance carriers, OEMs and MSOs to work together to identify the best approach for repairing vehicles safely and correctly while balancing costs, cycle time and vehicle value.

 

    • OEM Certifications – Hand-in-hand with repair standards are expanding certification requirements from the OEMs. This will be most challenging to independent shops who cannot afford to pursue these certifications across a number of vehicle makes.

 

    • Pre- and Post-Repair Scanning – As repairers gain a more comprehensive understanding of the need for pre-and post-repair scanning, there will be an opportunity for engagement with the insurance carriers on the costs and education with the consumer on why it is a critical element of the repair process.

 

    • Self-Management – Insurers are moving toward a self-managed model with large MSOs to streamline their process and better serve their customers. This requires the MSO network to champion training and develop processes that guide consistent, high-quality repairs at every franchisee location in the system.

 

CARSTAR is anticipating a wider use of PBAs as more insurers gain comfort with the concept and margin pressures force them to think differently about their business – which bodes well for high-performing networks like CARSTAR, who can “self-manage” their networks. CARSTAR is dedicating resources towards helping franchise partners understand the requirements of PBA’s, and how to adhere to them:

  1. Creating customized insurance plans for each store in the CARSTAR network that aligns with the EDGE Performance Platform.
  2. Expanding the CARSTAR account management team and aligning the continent to zones providing better store-level support.
  3. Forming an analytics team to provide strategic support enhancing the ability to make data-driven decisions and create a performance culture that pivots based on leading indicators instead of reacting to lagging results.
  4. Building a central review team that works in collaboration with the CARSTAR operations team, stores and insurance partners to deliver a fully self-managed service. Central review is also creating a learning pipeline for the benefit of stores and their employees.
  5. Transforming the care center into a client and franchise services team supporting multiple programs internally and externally.

“Working with our franchise and insurance partners, we have been able to make great strides over the past five years in driving our performance and growing our insurance business,” said Arlo Johnson, Vice President of Sales for CARSTAR U.S. “This requires open dialogue, a mutually agreed upon roadmap for success and a strategic vision for the future.”

Johnson is eager to continue building on the current growth of CARSTAR. If you have any questions on how CARSTAR can support you, please reach out to Arlo Johnson at ajohnson@carstar.com.

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