auto insurance companies run auto repair shops?

[jred321]

ok, so i just sat through a presentation from our auto claim department on a new system they developed, and they were talking about having partnerships and working hand in hand with body shops for claims and repairs, like i'm sure all insurance companies do.

while i was zoning out, i wondered why don't insurance companies just run auto body and collision repair shops? i would assume they're relatively profitable seeing as how there are so many of them, so losing money doesn't seem to be an issue. most of the work that gets done there is most likely an insurance claim anyways, so any shop overhead can be significantly lessened and overhead brought way down. they can also do repairs for other insurance companies, so the competitors could be paying them. it'd also be easier to control more tightly what is actually being done to the car. the insurance company could open up shops all across the country, so they could get volume discounts for their parts and be more competitive than local shops. and it'd also be cyclical, since they would be saving money, part of that would be passed back to the consumer, so more people would buy their insurance, and so forth. obviously you wouldn't want the name of the body shop to be the same as the insurance company, but from an ownership perspective the insurance company would own it

so how long will it be before this happens? and for home owners insurance, construction companies? same thing basically.

 

[wannabe]

we do.

 

[wannabe]

sorry to bust your bubble...

 

[jred321]

you own the actual shop? i know progressive has drive up claim stations where they can do appraisals and they'll take your car from there but the actual work still gets sourced to an outside shop

 

[wannabe]

well i'm not sure exactly how it works since im not in claims, but i know there are a couple here in cleveland that we have piloted. i know that theres one for sure, you drive up, drop your car, get a rental, they fix it there, and then you come back and get it. the actual shop may be owned by someone else or outsourced though, we may not directly pay those people...but i dont know for sure.

 

[wannabe]

you got me second guessing our claims process now...

 

[jred321]

the pilot you talked about is how our new system that i had a presentation on works, but someone else still owns the shop, they just have our stamp of approval and can do whatever work they want, so i say might as well own the shop

 

[wannabe]

<TABLE><TBODY><TR><TD class=headline>

Fender Bender Mender; Trust Us: Youve Never Met a Concierge Like Progressive Insurance CEO Glenn Renwick​

</TD></TR><TR><TD height=10></TD></TR><TR><TD>Continental Magazine</TD></TR><TR><TD height=10></TD></TR><TR><TD>August, 2005</TD></TR><TR><TD height=10></TD></TR><TR><TD><SCRIPT language=JavaScript> if( navigator.appName == 'Netscape' ) { document.writeln(unescape('%3cpre class="story" wrap%3e%3cdiv%3e')); } else { document.writeln(unescape('%3cpre class="story" style="word-wrap:break-word; white-space: normal;"%3e%3cdiv%3e')); } </SCRIPT>

Walk into any auto body shop and youll probably find a few frustrated insurance customers. Some are waiting for an estimate of repair costs. Others are picking up their repaired cars. Or theyre back a second time to get the repairs repaired. But at 21 Progressive Insurance concierge centers around the country, customers arent waiting. Theyre handing off their cars to be repaired, picking up a rental, and going about their business. The whole process, company officials estimate, takes no more than 15 minutes. The customer doesnt have to obtain estimates or worry about who is going to do the repair. Instead, Progressive contracts with body shops and car rental agencies to make the claims process as painless as possible. Such devotion to customer satisfaction has helped grow the Mayfield Village, Ohio-based company into the nations third-largest auto insurer, with $13.4 billion in net premiums in 2004. We asked ourselves whether we could change indemnification from handing customers a check to handing them a repaired car, says President and CEO Glenn Renwick of the decision to create the concierge centers. In todays society, time is so important, and the hassle factor of auto accidents is so high. If we can make accident insurance a more positive experience, were ahead. Progressive plans to open at least 50 more concierge centers, most of them freestanding, in areas with a high volume of claims. The centers will complement, but not replace, the companys 450 claims offices nationwide. From those offices, claims representatives visit customers homes or offices to make estimates. At Progressives concierge facilities, customers leave their cars under a canopy, and the vehicles are whisked into estimate areas equipped with lifts and skilled technicians out of the customers view. In the colorful, utilitarian lobbies, claims representatives wait at podiums. After a little paperwork, customers walk out under another canopy to a waiting rental car and are on their way. Once a car is repaired, the body shop returns it to the concierge center. There it is inspected, allowing Progressive to guarantee every repair, something the company says none of its competitors do. A single point of responsibility is what were after, says the 50-year-old Renwick. Customers value this and tell us so. It has become a real wow factor. Noncustomers involved in accidents with Progressive customers can use the concierge service, and theyre telling people about it. Current customers are talking, too. Ive never seen anything with so much buzz, Renwick says, noting that the company has done only limited promotion of the service, including a DVD that highlights the centers. Most concierge customers are referred by the companys claims agents. Progressive opened its first concierge center in 2000 and tested the concept rigorously before the larger rollout. Among the issues were cost neutrality in comparison with claims centers, increased productivity for adjusters, and customer satisfaction. Renwick considers the concierge center idea to be a redefining of his product along the lines of Dell Inc.s innovation Dell didnt invent computers, but it became successful by pioneering a new way to order and deliver them. Is Renwick concerned that just as other computer makers followed Dells lead, other insurance companies will copy Progressives innovative way of delivering claims adjustment? Not at all, he says. In fact, that would be good for customers. Well just think of something new.<SCRIPT language=JavaScript> document.write(unescape("%3c/div%3e%3c/pre%3e")); </SCRIPT>
</PRE></TD></TR></TBODY></TABLE>

 

[wannabe]

maybe i'm wrong...(dunno)

 

[jred321]

yea that's basically what we're copying, a little different but same basic idea, making it as simple as possible for the customer progressive does a lot of innovative things in the industry and then others copy them

i say though, if you're going through all of that trouble, why not just fix the car there too?

 

[wannabe]

too much liability maybe. if something happens to your car because of the work done, you could squeeze a lot more out of a company like progressive than your father and son auto shop..but i dont really know. i'm not involved in those decisions im sure someone in corporate legal has a reason.

 

[jred321]

that's why you by insurance to cover those liabilities then if they sue it'll be one department against another rather than 2 separate legal entities so costs there would be less as well

 

[ddunk80]

Well other auto service centers I know run some auto insurance... I not sure thought about the other shops.