Representatives of Toyota drew multiple rounds of applause at the Collision Industry Conference (CIC) in Las Vegas in November as the automaker previewed what it is referring to as a “predictive estimating” system for its vehicles.
Toyota’s Jerry Raskind called the system a “game-changer” in that rather than having an estimator start from a blank page and add line items based on what they know or can locate about OEM procedures, the new system begins with a complete estimate that incorporates all necessary parts and Toyota-recommended procedures, along with links to all related Toyota bulletins and published documentation.
The system allows the user to adjust the estimate, such as changing the type of part to be used or omitting a procedure not necessary based on the actual damage to the vehicle. Repairs can be substituted for parts replacement. But Toyota believes the system will help ensure estimates are more likely to be completed based on the automakers’ prescribed procedures.
“They’re more likely to include all the appropriate repair methodologies, procedures and parts, and won’t miss any of the key repair items,” Raskind said.
As demonstrated, the system requires the user only to select the damaged portions of the vehicle (left front fender, for example), and all items related to that section of the vehicle are automatically listed, including such item as one-time use fasteners, necessary information labels, and procedures such as color sand and polish (with a link to Toyota’s bulletin indicating that is a procedure necessary even at the factory).
“Everything you need to fix our cars correctly and to our standards is there,” Toyota’s Rick Leos said. “I don’t need all kinds of opinions on how to fix our cars when I have engineers who are telling me how to fix our cars. That’s who I’m relying on. So now if someone wants to challenge this stuff, we have engineers to give them the answers. It’s no longer just you and your opinion, and the guy down the street who ain’t doing it.”
Leos, who said he is in discussions about the system with CCC Information Services (and has contacted the other estimating system providers), used the system at the meeting to prepare a $10,000 estimate in two minutes.
He said he hopes to have the system completed on Toyota’s top four vehicles during the first quarter of 2013, and he said other automakers are interested in working on the project as a joint venture.
Response to Toyota tool
When asked about insurer response, Leos said he believes the system will help smooth out some of the variances in estimating.
“We have had some talks with insurance companies…and they’re not negative on this at all,” he said.
Herb Lieberman of LKQ Corporation called the system “the right thing to do,” but asked Leos about what he termed the “unintended consequence” of more cars being totaled but ending back on the road after being rebuilt to no standard. Leos pointed out that the system allows the user to adjust the estimate, for example, to use alternative parts.
“But what if a car totals because we’re going to fix it right? Then that’s probably where it needs to be,” Leos said. “I can’t stop the rebuilders in this industry. They’ve been around for years. They always will be. Salvage value will actually go down, not up, if that’s the case. So the insurance company might want to throw a little more money into fixing that car.”
One shop owner at CIC told Leos this could reduce both the number of estimators he needs and the experience level they would need to prepare thorough estimates.
Iowa shop owner Bob Jones said he had considered something similar in years past, perhaps ordering everything needed for a corner hit as kit, for example, but that insurers would balk if the unneeded items included initially were removed from the bill later in the process. Leos reiterated that he envisions an estimator taking the estimate that the system generates out to the car to omit parts or procedures not needed for that vehicle’s particular damage.
Some of the groups who earlier this year called on automakers to help the industry establish OEM procedures as the industry’s “repair standards” praised Toyota for getting shops this easy access to the company’s repair procedures.
“We really appreciate what you’ve done to lead the pack,” Scott Biggs of Assured Performance Network told the Toyota representatives.
“You opened the door for us,” Raskind told the groups who have pushed for OEM procedures as the industry’s repair standards. “We’re now taking a bold step through it.”
New chairman offers perspective
Also in Las Vegas, Mike Quinn of Caliber Collision completed his final meeting as chairman of CIC, and George Avery of State Farm offered his thoughts as the incoming chairman. Avery acknowledged that his selection to lead CIC, which was made by those who have previously chaired the conference, has not been universally popular – particularly among those discussing it on “social media” – given his role at State Farm.
“The past chairs did select George Avery, not necessarily the company that he works for,” Avery said. “The George Avery that accepted was the one who started as a painter’s helper and over the years has made his way through the collision industry.”
Avery’s career at State Farm has now spanned more than 30 years. He is not the first insurance company representative to chair CIC. Joe Landolfi chaired the conference in 1995 and 1996 when he was an executive with Kemper Insurance. And Roger Wright joined AIG Insurance several months into his two years as CIC chairman in 2003 and 2004.
Avery in Las Vegas reiterated his believe in the value of CIC, noting that the industry in Canada used CIC as a model for a similar organization in that country, and that the restoration industry on the property insurance side is “desperately today trying to get a CIC to get all stakeholders in the room.”
“So we can’t lose sight that CIC is a place where we can all talk,” Avery said, “We all go to meetings with our own folks, our own disciplines, and that’s healthy and good. But having an opportunity to all get together is very important.”
Avery said he is working on a system to give more participants at CIC “a voice” even if they don’t get up to the microphone at the meetings.
He will chair his first CIC meeting on January 24-25 in Palm Springs, CA.
That meeting is CIC’s biennial “planning meeting” at which the committees and broad subject matter for the coming two years are developed.
John Yoswick, a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). He can be contacted by email at jyoswick@SpiritOne.com.