New Zealand's Collision Repair Association (CRA) has taken to the airwaves with a strong message for consumers about IAG's Repairhub initiative.
The general manager of CRA, Neil Pritchard has branded the move anti-competitive and says it signals the erosion of consumer choice and competition in the industry. He warns that the quality of vehicle repairs may drop as the country’s largest insurer opens its own panel beating shop under a new trial.
The new model proposed by insurance firm IAG (which in New Zealand includes Lumley, NZI, State and AMI) would see its customers required to have their vehicle repaired at an IAG owned repairer.
“Our concern is that under a model where the insurer dictates the standard and scope of the repair, there will be no oversight in place to protect the consumer.
“Even seemingly minor or cosmetic repairs to modern vehicles may have underlying damage to sensitive radar and sensors - requiring specialist expertise and equipment to diagnose and effect suitable repairs - and it is important that motorists have a resolution structure in place which provides a degree of independence in the event of any issues,” he says.
Pritchard says customers may also find their new vehicle warranties are voided if repairs are not made at an approved repairer - particularly if non-genuine parts are used.
“While the Consumer Guarantees Act will remain as a potential means of redress, the prospect of facing their insurer in a disputes tribunal hearing will be off-putting for many motorists.
“It is also unclear what happens if a customer has a poor service interaction with an IAG repair shop - and whether they will be forced to use it again in the future if they remain with that insurer,” he says.
Pritchard says there are also potential concerns around how this move will be communicated to customers.
“Existing customers of IAG may see the fine print of their terms and conditions simply adjusted when it comes to their annual renewal.
“New customers may be required to ‘opt-out’ when applying for insurance for the first time or face higher premiums,” he says.
Pritchard says IAG’s claims that the new venture is necessary due to processing delays in the current repair network is merely a smokescreen for the introduction of a purely profit-driven strategy.
“This model is rare overseas, and the move to become more vertically integrated here is purely profit-driven - and at the expense of consumer choice.
“Our concern is that New Zealand consumers are being used as part of a trial which could then be expanded into their other markets through IAG Australia.
“We would like to see the insurer working more closely with existing repairers to help reduce repair times and communication with customers,” he says.
IAG have repsonded with the following statement:
Customer first in IAG Repairhub trial
IAG is putting customers first by opening a trial motor vehicle repair facility, Repairhub, in East Tāmaki, Auckland, next month.
It is designed to help improve customer experience. The trial is in response to feedback from customers, who have said they want: repairs completed more quickly; repairs completed to a high standard; and improved communication during the repair process.
Repairhub staff are specialists in motor vehicle repairs. They will have access to enhanced international technologies, improved systems, high-quality equipment and high-quality parts to ensure that the expectations of our customers are met at all times.
All motor vehicle repairs undertaken for our customers come with lifetime guarantees from IAG, and this will be the same for repairs carried out by Repairhub. This means that if there are any issues with the repairs, IAG will make sure they are fixed.
IAG’s Executive Manager Claims Services, Dean MacGregor, says Repairhub will trial enhanced technologies and techniques in the international car repair industry. MacGregor says that such technologies and techniques are mainly in the equipment, repair processes and paint Repairhub will be using.
“We have talked to our customers about their experiences when getting their car repaired. This trial aims to respond positively to that feedback.
“One of their real frustrations revolves around the process and not knowing what is going to happen next, or how long it will take.
“We will be trialling a process to manage the entire process with the customer, to ensure they are kept fully informed and provided courtesy cars if required.
“Repairhub will use cutting-edge technologies and stream-lined processes to provide greater customer experience, further improve quality and get our customers’ cars back on the road quicker.
“From the moment a customer lodges a claim to when they pick up their repaired vehicle, Repairhub will have the customer’s needs at the heart of its operations,” MacGregor says.
Importantly, IAG customers will continue to have choice over who repairs their vehicle and there are no plans for that to change.
“The customer is our first priority. The customer gets to choose which repairer they go to, whether that is a member of our approved repairer network, Repairhub or otherwise.
“IAG is taking its responsibilities seriously as an industry leader in building this facility. We will use the insights we gather to continuously improve the service as we move forward,” he says.
“We continue to have a very strong relationship with the industry and industry bodies, and we look forward to a continuation of that,” MacGregor says.
As New Zealand’s largest general insurer, IAG is a strong supporter of the motor vehicle repair industry. IAG has been supporting its trade industry networks for the last 17 years through the IAG Trade Scholarship Programme. Each year, IAG pays the tuition fees of, and provides mentoring to, a number of apprentices across New Zealand. This year 107 people were part of the programme, with approximately half of them in the motor repair industry. Since 2002, IAG has put a total of 515 people through this programme.