Motor Claims Festival Supply Chain Q&A with Paul Sell, Stuart Sandell, Neil Joslin and Marc Holding

  1. As we move away from the pandemic, do you see a time of growth ahead or will the threat of a second wave make us more cautious. Also are you making preparations for a potential second wave and is there anything you have learnt from the first wave?

Paul: From our perspective we see inconsistent traffic and claim volumes still and we expect this to continue for a while yet with spikes and drops in volumes. We learnt from the first wave that having cloud-based technology which our client partners can use to supplement and support their operating model (or replace it in some instances) is incredibly helpful. In both Motor and Home customer adoption of technology increased, this helped to keep engagement with customers at their time of need, keep them safe and enable employees to work from home doing desktop assessments.

Stu: As a business we are cautiously optimistic about the future, different areas of our business will return at different rates. Claims volumes are likely to remain supressed for sometime so we must work on ensuring everything do drives optimum performance and efficiency. A second wave is largely out of all our control so it is all about preparedness and as a business we have learned a lot and will be better prepared for localised or national lockdowns or reactions to a second wave.

Neil: We’ve seen a gradual but consistent increase in volumes since early May and expect this to continue, perhaps with little kick-ups around instances of good weather especially over weekends. There’s no evidence (yet) of caution for a second wave, although we continue to plan for the worst and hope for the best.  We track other data sources (parking data, map/sat nav data, telemetry, plus of course Government updates) to inform our thought process and planning.  Yes, we are preparing plans for a second wave, having learned so much (good and bad!) from the first wave – collaboration with clients is a key factor in those plans.  Also I expect an increased demand in other services – reclaimed parts for example – in the event of a second wave as undoubtedly supply chains will be impacted more second time around than they were the first.

Marc: Much like Neil, we have seen a gradual increase in volumes, with dips and plateaus along the way. We are waiting to see the impact of the forecasted ‘staycation’ this summer, as this could lead to a spike upwards in volumes. In terms of accident numbers, it appears they won’t rise exactly parallel to road traffic numbers; 50% more cars on the road doesn’t mean we will see 50% more accidents. Obviously, outside of the actual number of accidents, what goes on in the wider accident repair market will have an impact on our share of those accidents. How the market will play out over the coming months is still very much an unknown.

As far as a second wave goes, I think as a business and a country we are more prepared and aware than we were before March, so I can’t see us returning to previous levels of infection nationally. We may see local spikes, as recently seen in Leicester, with the quality of the track and trace scheme being the biggest impactor on this, hopefully containing any hotspots. However, should I be proven wrong and we end up back in a difficult situation as a nation for any real length of time, it will almost certainly be a very problematic time for businesses if government support isn’t there.

2) Your businesses will have implemented all sorts of things to cope with Covid19. Which ones will you retain in your business when normality or near normality resumes?

Paul: We largely helped implement new processes and technology for others, most of which continues today, for us, as a cloud-based business with remote working in place we didn’t need to change too much.

Stu: All the things that have made us either more efficient or driven better outcomes for our customers and people. We will see more enhancements to the customer journey as I mentioned in the panel discussion and these are here for the long term. Things like enhanced cleaning and protocols around contact with customers will live on as well in my opinion.

Neil: There are some key positives that have really come to the surface.  We’ve a wealth of data in our business which is useful to dive into at any point but it’s been a great reminder of the key metrics that keep the business healthy.  Flexibility for staff working from home or office has clearly been a positive and we’ll keep this going forward.  Improved communication with clients and our network has really helped collaboration when trying to address a shared problem.  Increased data sharing in this has (mainly clients sharing more data with e2e) been a huge positive.

Marc: A real benefit for us over the Covid period has been the speed with which we could make decisions. We push ourselves to be a proactive and dynamic business with regards to change management, and circumstances meant we needed to ramp this up over the last three months. I want us to ensure we do not lose that speed of action. Additionally, we want to continue with the increased level of communication and coordination we have had throughout the business. We have shared a great deal of detail and thoughts with staff and the two-way feedback has been a big part of the changes we’ve implemented over the last few months.

3) Do insurers specify a sanitising process and/or require evidence of cleaning performed by the repairer

Neil: Not quite the same challenge for salvage, clients understand that vehicles are prepared (as is usual pre-COVID practice) when they first arrive at site – cleaned down (inside & out), photographed, inventoried, etc. before being placed into storage racks by forklift and thereafter only moved around by forklift.  Vehicles are left untouched for at least 72 hours if suspected of being infected, and longer once placed into the storage racks which enables the virus time to die out completely.

Marc: There has been no specific process put forward to us, but we are communicating with our insurance customers on how we are protecting the safety of their customers. I would imagine that the evidence stage will be in place over the coming months, as audits start back up.

4) Should the cost of safety be passed onto the insurer or the work provider?

Stu: Operating costs are increasing as a result of the pandemic and this will no doubt be reflected in pricing across all elements of the supply chain.

Marc: All businesses will need to review their costs, both fixed and variable, and price accordingly. Not sitting on the fence here, but how a repairer wants to charge an insurer for its services is up to them to agree with its customer. I think the one piece of advice I would give, is justify your pricing properly.

5) Do for instance a supermarket charge for additional fees for sanitisation?

Stu: Bit of a tenuous link here, I’m not sure any of us can comment on the pricing policies or operating costs associated with supermarkets?

Marc: See above; every business in every industry will be reviewing its pricing models, as it will be reviewing its own supply chain and costs. It happens normally and will be happening now.

6) Do we genuinely believe that we will see some collaboration, shouldn’t have taken a coronavirus to make people open their eyes to realise that this is a complex industry made so much harder because of people desire to not work together.

Paul: We are seeing some excellent collaboration in this period in the motor sector, we have completed integrations with CAPS, Audatex and GT Motive to make it even easier for bodyshops and others to access our products and services. There have been other examples in the industry too such as Fix Auto sharing their research on available grants. We hope this can continue and certainly look to bodies such as ILC to help make this happen.

Stu: I belive there has always been collaboration across supply chain and with insurers. Maybe it has taken a pandemic to highlight this but I don’t believe it’s a new thing. Could there be more? Yes, but compared to other markets there is a lot.

Neil: Yes, collaboration has improved although it was always there, hopefully it’s a step towards even stronger partnerships.  I think it’s been a great eye-opener for insurers to realise how much they depend upon a strong supply chain, and the importance of protecting and working with that supply chain – we’ve experienced this first-hand.  Clearly action plans have been reactive given no-one could have planned for COVID.  It’s natural to discuss/communicate more when there’s a problem to fix, and I’m hopeful the pandemic will encourage collaboration more regularly to avoid problems from arising and/or to have a plan for when they do e.g. through joint contingency planning.

Marc: As the others have said, I think we sometimes miss the fact that we are actually very good at collaboration as an industry. As repairers it may feel a little disjointed due to the quantity of businesses in our arena and I think that there is an argument that only the genuine market wide issues require industry wide representation and collaboration. Although we all have a vested interest and passion in the market and its health, we have to be honest and accept that, as competitors, customers and suppliers we are all looking for market differentiation for our businesses, and that will impact how collaboration works.

7) Going forward post covid will insurance companies allow and pay for VDA’s to work more remotely or travel to see customers in situ?

Paul: We have certainly helped VDAs work remotely with our media being available anywhere, anytime and increasingly with work being something you do, rather than a place you go we would see this being something that becomes one of the many parts of a new norm.

Neil: VDAs have been in use across our network for some time, I’m not sure this is a cost we’d expect insurers to fund.  For sure, insurers will assess the benefits of providing VDAs to their own people, in line with strategies & policies in respect of supporting remote working.

Marc: Same as above really, how a repairer wants to charge an insurer for its services is up to them to agree.

8) Does the panel accept that future capacity management of volumes will require big changes or will WIP still be needed, which only adds cost?

Neil: No big changes envisaged.  The beauty of the e2e network is the amount of capacity and flexibility within it – >500k vehicles processed each year as the UK’s largest salvage network.  We’ve all been hit by reduced volumes but various Government schemes have provided some support to mitigate the impact.  Scaling up for an increased volume (as people avoid public transport, etc.) is no issue, the volumes are unlikely to be significantly increased.

Marc: I think I mentioned it on the call, but there are many areas to look at with regards to capacity management. One of the reasons I love the accident repair industry so much is the challenge of dealing with variable demand; both quantity and customer led, whilst having quite a rigid asset to service this (a bodyshop). We have found that utilising remote imaging and making better use of FNOL time, as well as direct to salvage programmes, have started to make this easier. We have also benefitted from increasing variable elements to our cost base in key areas, such as mobility. Repairers continue to make big improvements on K2K times which reduces WIP levels considerably, but there are still system conditions that limit that, predominantly around parts supply. Personally, I believe that remains the biggest inefficiency in the process that we can and should focus on. That’s before remember to consider the impact of Brexit (the impact of which was the big talking point only a few months ago).


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