Volumes may have hit the floor in the last week, but repairers have been told that a better way of working may emerge from the devastation of the Covid-19 crisis.
Speaking during the third weekly webinar hosted by ARC360 in association with I Love Claims, Ryan Mandell, director, claims performance (pictured above) - auto physical damage solutions, Mitchell International, said, ‘Some shops feel optimistic for 2021 and beyond. There could be a real opportunity to thrive.’
It might be difficult to envisage in the midst of a crash in volumes of about 80%, but Mandell said that claims could surge next year as people spooked by the virus stayed in their cars, while efficiencies learned this summer could help businesses make the absolute most of an upturn in work.
Mandell was joined on the panel by Chris Weeks, executive director, National Body Repair Association (NBRA); Michael Golding, network manager, LV=; and David Shepherd, regional managing director, Solera, all of whom agreed the industry landscape will be forever changed, but not necessarily for the worse.
Recovery
Meanwhile, Shepherd pointed out that, actually, it is during the recovery phase of an economic crisis that many businesses face their most challenging time as they resume trading but don’t have capital behind them.
"Just as repairers have been impacted by a loss of volume, so have we. But we will do whatever it takes to help our customers and are working on a number of initiatives right now. We want to look after our customers and we want them to still be our customers after this," he said.
Weeks emphasised how such initiatives, along with many other support measures emerging across the sector, are just some indications of an industry rallying together through a crisis which has only deepened in the last week.
Reality
Interim results of a UK repairer survey being carried out by TrendTracker, in partnership ARC360 and the NBRA, highlighted the stark reality of an industry in crisis right now. The survey is running until Friday (3 April), but as of Tuesday (31 March) nearly 49% of respondents suggested notifications were down by more than 80%, with a further 19% of businesses putting the decrease at between 71% to 80%.
Another 11% said notifications were down by between 61% and 70%.
Golding said: "We’re now beginning to enter a new phase which I think will last for a number of weeks. We need to prepare ourselves for this being the new normal for some time."
Shepard agreed, saying Audatex had seen claims volumes drop off dramatically this week by about 70%. He said government policy would determine if that was the real floor or a false one.
"If the UK stays in partial lockdown we expect volumes to drop by 75%-80%. But in China their lockdown was total and we saw reductions of 100%. Overall, we’re expecting reductions for the year of about 25%."
That was a figure Mandell recognised, suggesting Mitchell was planning for similar results – although he said America is lagging behind Europe, to date, in terms of coronavirus consequences on the industry.
"I think there is still some runway for us to see lower volumes. In the US we’ve only seen about 30% reduction in volumes. We think it will cap out at about 80-85%."
Buckling
These sorts of numbers were unimaginable just one month ago, and after little more than a week of partial lockdown bodyshops in the UK are already buckling. The TrendTracker survey found that 46% of respondents had already announced temporary closures, with a further 28% saying they expected to close shortly, possibly as soon as the weekend (4-5 April). This would leave just one in four repairers still trading come Saturday morning.
Weeks said: "This is probably the biggest challenge any bodyshop has ever faced; they’re paying fixed costs with about 20% of income. It’s almost impossible to break even let alone make a profit."
"If I could ask one thing of insurers, I’d ask them to clear the decks in terms of what they owe bodyshops. Bodyshops are going to struggle to see this through. If this goes on for six months the impact on our industry will be devastating. Coming out of this there will be a similar number of claims again. If we want bodyshops to be there we really need to do something."
For a full recording of the webinar, visit:
https://www.iloveclaims.com/motor_claims/video-of-arc360-webinar-1st-april/
To sign up for next week, go to:
https://zoom.us/webinar/register/WN_0eslN5W0TomZvyY1SNYuGw
(Editor's not - it's a 13.30pm GMT which I think will be 10.30pm given the clocks changing.