Erick Bickett, Progressive's Concierge Program, Crash Prevention, Allstate Compliance
20 years ago in the collision repair industry (July 1996)
Erick Bickett sees two possible scenarios for the future of electronic claims handling.
Bickett, a California shop owner whose name has become synonymous with the effort to standardize how shops and insurers link their computer systems, explained the two scenarios to those attending the Collision Industry Conference (CIC) in Phoenix in July.
In the first scenario, he said, insurers increasingly dictate which computerized estimating system that shops participating in its direct repair program (DRP) must use. To participate in multiple DRPs, shops will likely have to have two or even all three of the major estimating systems. Once the insurer chooses a system it will be difficult for that insurer to switch because that would also require the whole group of shops to switch. This lack of choice stifles improvements in the computerized systems, and prices escalate.
In the second scenario, the insurer uses the “network” of its choice to electronically send a standardized “assignment” to the shop. The shop uses its choice of estimating system, and uses the “network” of its choice to electronically send a standardized estimate to the insurer. Either side can switch estimating or network vendors based on price and performance without interfering with their communication.
Unfortunately, Bickett said, the industry seems headed more toward the first scenario than the second, but he hopes a demonstration of the second system now under way may help create the “market forces” needed to change the industry’s direction.
Bickett estimates the cost of running all three estimating systems at about $18,600 a year for hardware, software and training; at a 7 percent pre-tax net profit, Bickett said, a shop would need $265,000 in sales just to cover these estimating system costs. That, he said, is going to drive even more shops out of the industry.
“I think technology should be an enabler,” Bickett said. “It ought to enable people to do business better and more efficiently and to take better care of their customer. It shouldn’t be a disabler. It shouldn’t cause the loss of good collision repairers who know how to fix cars and take care of customers.”
Bickett said that under the second scenario, a shop’s annual estimating system costs would be about $6,500, and that the system would save insurers money as well. Most importantly, he said, it would give both sides more choice as to the systems and communication networks they use.
State Farm Insurance and two collision repair shops are currently participating in a demonstration of this system, and Bickett said a report on the project should be completed later this year.
– As reported in The Golden Eagle. Bickett has continued to champion the use of electronic communication standards developed by CIECA, the Collision Industry Electronic Commerce Association, which was established based on the work and discussions at CIC. State Farm remains one of the few insurers to allow its DRP network to use the estimating system of their choice; a 2016 survey found that more than one-third of shops have multiple estimating systems.
In 1996, California shop owner Erick Bickett was a key champion for the industry’s development and use of electronic standards for the communications among shops, insurers and vendors.