UK repairers sign anti-steering petition

UK repairers have signed a petition to legislate against 'steering', but one industry observer believes the move to legislate could have adverse effects on bodyshops.

More than 500 UK repairers have signed a petition to present to British Prime Minister Gordon Brown to introduce legislation to prevent insturance companies and fleet management companies steering repair work to the companies' own network of repairers.

The petition, which can be viewed at http://petitions.number10.gov.uk/Anti-Steering, calls for legislation that will ensure the vehicle body repair industry remains able to trade freely and without restrictions imposed by vehicle insurance companies and motor vehicle fleet management companies.

However, one industry figure believes the petition is not a good idea.

Former Audatex (UK) director, David Murby, who now runs his own business Numina Consulting, believes that at face value the idea that an insurance company cannot 'steer' its policyholders to a preferred repair facility seems fair enough.

"However my belief is that directing a driver to an approved repairer is good for the policyholder, good for the insurer and good for the repairer," he said.

He suggested anyone considering legislation would put the consumers' interests first and he believes there is a strong case for approved repairer networks from the consumer's perspective.

According to Murby, most people when they have an accident have no real idea of what to do with their car.

"Vehicles are complicated these days and the majority of people worry about the reliability of the repairer that they are going to take their car to," he said.

"From the policyholder's perspective, being told where to go by the insurer makes life so much simpler and gives greater confidence. Policyholders are going to continue to prefer approved repair networks."

Murby pointed out that in the UK the policyholder has always had the right to take a vehicle to a repair facility of their own choice.

"Many people may not know of this right, but often those who are aware do not exercise it because the benefits of going via the insurer approved repair program are much greater than going the independent route," he said.

"Here's the downside for the repairers; loss of the approved repair network approach is going to mean competing directly with every other repairer in your area," he said

He said vehicle manufacturer approvals would help give confidence to the policyholders but the costs of attracting business will be huge.

"Most UK repairers do not have this money to spare, but even if they did it's not something they're good at and the small independents are always going to lose out to the vehicle manufacturer approved site under this scheme and also to the bodyshop groups with their greater advertising spend capability," he said.

"This requirement to advertise will put hourly rates up but not profitability as all the additional revenue goes to acquiring business.

"Costs to insurers will go up and premiums will increase with no profitability gain for insurers.

"Total loss rates will climb even higher driven by the increased hourly rates and there will be less work for bodyshops."

From ABP Club