Plenty of great information and ideas filled the room during the Thursday morning business session at the 2016 ABPA Annual Meeting & Convention in Miami.
Among the highlights:
Bob Passmore – PCI
The day’s first keynote address was presented by Bob Passmore of the Property Casualty Insurers Association of America (PCI). Bob noted that there has been a recent upturn in the number of vehicle accidents, reversing a steady decline over the past several years, possibly due to a resurgent economy, more congestion and poor driving habits such as texting while driving.
Bob then covered pending legislation that would curtail consumer choice of collision repair parts in Maryland (“Dead.”) Michigan, and New York (requiring disclosure on parts use). He also cited a Michigan bill that would prevent insurers from requiring collision repair shops to order from the insurer’s online parts program.
The biggest news on the legislative front is the steady progression of the PARTS Act in the U.S. Congress. The PARTS Act would reduce patent enforcement on collision parts from 14 years to 30 months, and would allow aftermarket manufacturers to design, produce and prepare to market parts during the 30-month period. There are currently identical bills in the House and Senate, with a growing list of sponsors on the House side. The next step is a hearing in the Senate and “markup” in the House.
Bob covered additional topics of importance, including salvage issues still lingering after Hurricane Sandy, DRP and steering issues facing body shops, “right to repair” legislation in several states, and the push to create traceability of parts to assist in managing parts recalls.
A Lively Panel Discussion
Answering the call from members for a dialogue on improving the relationship between the aftermarket, body shop, and insurance industries, ABPA President Jim Smith moderated a panel discussion featuring industry leaders from across the board.
- Jeff Shroder (Car-Part.com)
- Don Ashby (Nationwide Insurance)
- Dave Smith (Caliber Collision Centers)
- Bob Frayer (NSF International)
- Dex Dextraze (Farmers Insurance)
- Danny Wilkins (Service King Collision)
The wide ranging conversation included frank discussion of topics of common concern, including the overriding importance of cycle time improvement, the insurance industry’s focus on partnering with the right vendors, the need to integrate parts numbering with estimating systems.
Dave Smith noted that “price is important, but is trumped by the customer experience.” Don Ashby concurred, noting that, “Insurers are focused on customer experience.”
Dex Dextraze cited a J.D. Power survey that revealed the most important factor in a repair for the customer is knowing when they will get their vehicle back. This led to a conversation about parts delivery expectations. Don Ashby said they expect “same day delivery in a metro area, often 2-3 deliveries per day, and at least next day delivery in more rural areas.”
The insurance participants stressed the importance of traceability of parts. Bob Frayer of NSF said certified parts generally have better traceability, often better than OE parts as they are “produced in smaller lot sizes and are easier to track.”
Frayer also noted the success NSF was having with its certification program for parts distributors, “the most important thing NSF has done since entering the marketplace.” NSF is now beginning a certification program for collision repair shops to further validate the soundness of the supply chain from parts to customer.
On the ability of parts distributors to get more insurance work from collision repair shops, Frayer suggested certification was an important factor. Danny Wilkins noted that pricing is important, but “not at the top of the list. I want the ability to count on you. We need consistency and reliability.”
Don Ashby recommended distributors invest in technology around inventory management. Concurring, Jeff Shroder said distributors need to make sure their parts are “showing up where customers are looking” online, and that inventory management and estimating systems should communicate with each other.
CAPA Stakes Its Claim
Next, CAPA’s Jack Gillis addressed the crowd, highlighting the organization’s 30-year history and its successful efforts to turn around the attitude of insurers, body shops, legislators and consumers toward parts certification. He noted the rapid expansion in the number of parts being certified, with CAPA certifying 50% more parts in 2015 than in the previous year.
Gillis then raised doubts about the need for more than one certification organization, saying, “Multiple standards are fungible, and foster a race to the easiest standard.” He warned that consumer group may pull their support for the Quality Parts Coalition (QPC) unless the industry recognizes only one certification standard, saying, “You run the risk of diluting the meaning of the word ‘certification.’”
Gillis was challenged from the floor by outgoing ABPA Chairman Dan Morrissey, who told the audience, “No manufacturer, distributor or insurer has a problem with more than one certification program.”