Tuesday, 31 August 2004 17:00

SF: shops should set the bar for performace measurements

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The nation's largest auto insurer has no plans to join the other insurers setting performance benchmarks for shops participating in its direct repair program - but it may do more to help those 20,000 shops understand how their performance stacks up. 

George Avery, auto estimating consultant for State Farm Insurance, said his company looks for four primary things from the shops it does business with: competitive estimates, quality repair, accurate billing and customer service. But unlike some other insurers, Avery said, he doesn't anticipate State Farm providing percentage targets for such things as alternative parts usage that Service First shops have to meet.

"We are not interested in giving you a number to hit," Avery said, during a panel discussion at the Collision Industry Conference (CIC) held in Chicago in early August. "We don't feel that's our place. We feel you are the best ones to determine, for example, what the recycled parts use should be based on your market area and availability."

State Farm is looking at ways to give shops more access to statistics to see how their performance in key areas compares with other shops in order to help them remain competitive, according to Avery. He said the shop consolidators and multi-shop businesses in the company's "Select Service" program, which handle about 3 percent of the company's claims nationwide, may soon have password-protected internet access to such performance numbers. There may be technical challenges to giving 20,000 Service First shops similar access, he said, but he'd like to find a way to give shops more ongoing feedback.

Avery stated that Service First wasn't designed to give shops monthly or quarterly feedback but rather just to notify the shop when numbers seemed out of line based on the insurer's data management system. He said the "no news is good news" approach keeps the insurer out of the shops' way, but he also recognizes it can be difficult for a shop "to find out where you are without having some continuous input."

"I think we're going to lean more toward giving you more global information and letting you see how you compare to the market or to the state...so you can see where you fit and you can make decisions on how to move that number around," explained Avery.

Common concerns

During the discussion, Avery offered his views on a number of common concerns shops voice about insurers.

Why a shop's management report numbers for a given time period might not match the shop's performance report from an insurer. He said such differences are caused mainly because the management systems used by shops and insurers are different. But he said that a shop owner who finds his or her performance numbers regularly disagreeing with those provided by State Farm, should "push the issue" with local State Farm personnel to try to understand why those differences are occurring.

Why an insurer's claims practices may vary between states or even between markets within a state. Avery said such differences may result because state laws vary, or because of differences between urban and rural markets. He said he recognizes that such differences can be frustrating, particular for collision repair businesses in multiple locations, but he said local control has its positive side as well.

"I think there's a lot of benefit in having someone in your back yard that understands your market area," he said. "We could run it all from [State Farm headquarters in] Bloomington, Illinois, but I'm not sure you'd be interested in George Avery sitting in a big black box in the center of a cornfield in Bloomington making decisions about how it should be done in your market area. So it's a double-edged sword."
I-CAR's Rick Tuuri to chair Collision Industry Conference
 

Rick Tuuri, I-CAR's Director of Business Development and North American Operations was appointed Chairman of the Collision Industry Conference (CIC) at its August meeting in Chicago, Illinois. Tuuri will succeed the current CIC Chairman Roger Wright, and is eligible to serve two, one-year terms beginning in December 2004.

Tuuri will focus on the CIC vision for the industry, and plans to work with the conference participants to identify that vision. "Defining the vision for the industry is key to determining which issues to address and the priority in which to address them," said Tuuri. "The CIC has all of the talent and skills required to develop its vision and make it a reality for the collision industry."

Tuuri has been in the collision industry for over 25 years and has numerous professional achievements and recognitions. He is a member of the prestigious Collision Industry Hall of Eagles and served two terms as the Chairman of NACE Exhibitor Advisory Council (2001, 2002). Tuuri also served two terms as the Chairman of the I-CAR International Board of Directors (1999-2001), six years on the I-CAR International Board of Directors, six years on the National Auto Body Council Board of Directors (1996-2002), two years on the I -CAR Education Foundation Board of Trustees (2002-2003) and five years as a member of Independent Auto Damage Appraisers (IADA) Advisory Council (1998-2002).

"Rick will provide CIC with the necessary leadership and direction to remain focused on discussing and addressing industry issues and trends," said I-CAR Executive Vice President and CEO Tom McGee. "We also need to recognize and thank Roger Wright for time, effort, direction, and dedication that he has provided to CIC for the last two years."

"From my seat and a lot of State Farm seats, we are very interested in someone not performing the way they should be," he said. "When we don't do things right, it's very frustrating for you and there are lawsuits and other things that occur when we're not consistent, so I think we want to know, even as painful as it is. We need to get past it and uncover those people who are not doing things the way they should be. I believe the things we are doing are right, and it breaks my heart when it doesn't occur."
Why insurers sometimes seem to ignore a shop's positive performance numbers while focusing on the negative. "I hate to see a situation where it's 'Look how great I did,' and our response is, 'Yeah, that's good, but let's look over here at this deficiency,'" Avery said. "But I don't think that's our intent. I think our intent is to try to help repair facilities be competitive, and as a result, those are the things we focus on."
 

What a shop should do if they do not feel a local claims representative or Service First coordinator is performing appropriately. Avery said he recognizes that some shops feel that going to an insurance representative's supervisor could create trouble for the shop, but he hopes that doesn't happen.

"I hope we get beyond that," Avery said. "I hope as we partner more, I'd like you to be able to find out what the thinking was behind a decision or a procedure that any carrier has. I don't expect you to agree with it, but at the same time I'd like you to be able to climb high enough to where you get an answer that makes sense.

 

Other CIC highlights

In other news and discussion at CIC in Chicago:

• Toby Chess of CIC's Technical Committee said the committee compared an OEM replacement radiator for a Honda CRV with two non-OEM radiators for the vehicle. Their materials (plastic and aluminum vs. copper and steel) differed, as did the number of fins per square inch, the size of the transmission cooler and the tube diameter. He found similar differences between OEM and non-OEM air conditioning condensers. A representative of Modine said such differences could result in a system having 20 to 25 percent less cooling ability.

• Meanwhile, CIC's Parts Committee said the lack of standards and testing of remanufactured headlamps and aluminum wheels may result in poor or even potentially dangerous parts being used in repairs. Polishing of all but light surface scratches in headlamps, for example, can remove the outer film that ensures the longevity and clarity of the lamp. The committee found remanufactured wheels with cracks and with flange problems caused by over-machining. The committee said it believes CIC should create best practices regarding use of such parts, and that industry remanufacturing standards also should be developed.

• Rick Tuuri, director of business development and field operations for I-CAR, has been chosen to serve as chairman of CIC in 2005. The new chairman is chosen by past CIC chairmen. The current chairman, Roger Wright, will complete his second year as chair of CIC later this year.

• Representatives of ADP, Motor and Mitchell confirmed that "masking of inner edges" is a not-included operation in their estimating databases. Phil Cunningham of Motor said that "mask-close gap between adjacent panels" is included, which may be causing confusion but that "cover and mask recessed edges and jambs and weather strips to prevent overspray damage when necessary is not included.

Michael Banton, senior director of database operations for ADP, said his company plans to do some additional time studies to determine if masking of jambs and inner edges can become an included operation, making any appropriate adjustment to the labor allowances.

John Yoswick is a freelance writer based in Portland, Ore., who has been writing about the automotive industry since 1988.

 

 

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