DAILY NEWS Oct 31, 2012 11:28 AM - 0 comments

Insurer-Mandated Parts Procurement Affecting Canada, Other International Markets

RDE Session at SEMA highlights the impacts these programs have had on global markets

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bodyshopbiz.com 2012-10-31

Canadian collision repair expert John Norris will be providing insights on how insurer-mandated parts procurement has impacted the Canadian marketplace, as part of a special RDE session at SEMA this Thursday being presented by the U.S.-based Society of Collision Repair Specialists (SCRS). John is the Collision Chair of the National Automotive Trades Association of Canada (NATA) and Executive Director of Ontario-based Collision Industry Information Assistance (CIIA), the second-largest collision repair trade association in the country.

Insurance-mandated parts procurement programs—such as State Farm’s controversial pilot with PartsTrader, found in select cities around the United States—have occupied much of the collision repair industry’s discussion over the course of 2012. Despite public criticism from multiple affected industry segments, the industry continues to wait for any well-constructed explanation of how these mandated intrusions into internal business processes will avoid long-term harm to collision repair businesses and suppliers, let alone an explanation of how the programs provide benefits to industry participants.

“Providing information about the resulting impact of these types of programs is critical for collision repair business owners,” states Aaron Schulenburg, SCRS’ executive director. “The industry is hungry for information that will help them understand the potential ramifications these programs can have, so that they can effectively strategize how their businesses will react if and when the requirements become effective in their market areas. It is our opinion that learning from others who have experienced the impact first-hand is critical in understanding the likely outcome of the programs in our own country.”

As part of the Repairer Driven Education (RDE) series at the SEMA Show, SCRS had previously announced an interactive presentation with international guests from both New Zealand and Australia who will present, "Bidding Wars: A Global View on the Possible Economic Impact of Insurer Involvement in Parts Procurement."

“Insurance industry parts procurement is being aggressively pursued in Canada with one major insurer involved and more waiting to go,” adds Norris. “In insurer-dominant marketplaces, shops fear that saying no to an insurer’s program means the blacklisting of their business. Shops that agree to participate in insurer parts procurement programs in Canada have found their labour rates lowered, discounts taken, and parts orders taking extra days to arrive from distant and unknown suppliers, as the program restricts their supplier options to only those suppliers that agree to pay a fee to the insurer when parts are sold. Shops can not deliver on-time estimates, repair times and rental costs increase, while production efficiency suffers.”

For collision repairers interested in learning from your global colleagues about the impacts these programs have had internationally, make sure to register for the RDE session being held at 12:30 PM on Thursday, November 1st in the upper level of North Hall of the Las Vegas Convention Center. To register for this RDE seminar, or to find other seminars being offered, please visit www.semashow.com/scrs. Onsite registration will also be available if attendance is not at capacity.

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