Is the body shop business flat or is rampant insurance skulduggery hard at work? Not a week seems to go by where a new insurance broker or trade car damage appraiser company is issuing some new demand on workflow. It is not unrealistic to realise that volumes in many cases for the 3 000 or so repair centres or official repair shops are in a mysterious process of survival.
Don’t forget that we have only 30% of drivers who are taking out insurance, however, 15% are falling behind on keeping premium payments current. The Road Accident fund will cover physical injury claims to occupants/passengers but not on vehicle damage. But the RAF is currently now trading comfortably inside its five hundred million debt of insolvency – you know how far you’re going to get with that lot in the event of an accident.
When you take off the insured policy drivers, one is left with just two out of 10 drivers driving around with insurance. The secret message is that with few individuals left in the collision repair system, the market looks to remain a tight one. With no serious attempt by the government to rectify this huge mess, as well as their reluctance to give up over R5 per litre in tax for its continued progress, are we perhaps doomed? This is proof positive of their greed on taxes charged on each litre of fuel at the pumps. This is an outrageous tax on us plebs that vote them in – or out.
On the other hand, new safety devices like lane change sensors, anti-crash radar and a myriad of other electronic driver-avoidance technology are beginning to make themselves evident. All this is a sobering thought when viewed against the activities of our in excess of 100 short-term car insurers and key broker activities.
They all send out their own messages into the world of body repair how to go about repairing and what’s going on in their business. One major name at this moment is demanding a 5% discount for payment or you get to wait for 120 days before the debt pops into your bank account. Do these operators understand the repair process required and the indemnity for a guarantee on further claims if they are not programmed and installed as they are not plug and play items such as headlights or fog lamps?
A world of change is everywhere of course and measures are also happening thick and fast, resulting in a great deal of work steering which is not new to some major body repair organisations, of course.
Then there are the all-new preferred supplier collision repair lists appearing where you can get the opportunity to work for suppressed labour rates and the working staff are involved in sending endless images by email to obtain permission to start the repair. Of course, the cost of all that effort remains with the body shops and not the insurers.
Quite how some of these originally small insurance houses got so big in the last decade can, in my opinion, be levelled out as taking advantage of a trade that enjoys working for a ridiculously low charge-out labour rate in their hapless dream of business survival.
Now another ugly side of preferred procurement is becoming a very real threat to the “Ma and Pa” business operators across the nation. Backed-up by a load of heavy standard demands to comply with much of the repair work, now this business will need to be supplied to previously disadvantaged operators. It’s just another lurk to create a skewed market platform on work supply. Just whatever happened to a straightforward approval of a meritocracy is the question that South Africa needs to be asking. Body shops who have invested like crazy are overlooked for some “me-too” aspiring repair shop all too often.
I am unmoved as to the success of all these market interventions and as far as “process partnership” with your favourite insurance work supplier goes, your long coveted work supply deal is now suffering from a serious change situation going forward.
On the other hand, gentle repairer, you can simply keep opening the door at seven in the morning and hope you make it out through to the other side, for the conundrum of survival in this business seems to be ‘jokers are wild’. So it might be best to sleep with one eye open to retain gainful employment – that’s the quiet message anyway.
By Ian Groat