GT Motive & Service Certainty have integrated whereby Bodyshop’s will be able to seamlessly transfer photos captured by Service Certainty imageproof (self-service web-app or network of professionals) instantly into the GT Estimate.
Whilst COVID-19 (coronavirus) outbreak has increasingly impacted on all our lives and work, it
has also created opportunity to forge new relationships and integrations.
GT Motive continue to offer a free estimating solution and now Service Certainty imageproof
users in the UK can benefit due to this new integration.
Both businesses are committed to working innovatively to continue to support the UK Bodyshop
Industry with technology that is easy to use, cost effective, accurate and efficient. Cloud based
software supporting the current remote working conditions.
The integration will be provided free of charge as a benefit of customers of both companies and
follows the aim to ease the life of the Bodyshop’s through integrations and collaboration.
“By joining forces, we can provide an integrated solution that can streamline the process from
damage notification to estimating, reducing the overall claim cycle with direct impact for
insurers in their customer satisfaction. By integrating with Service Certainty, we can bring
further efficiency and simplicity to our customers through working with the market leader in
image capture solutions. “ – David Vella – Business Development Director
“We pride ourselves as being the market leading independent media capture solution, we are
always open to new integrations of mutual value and we are thrilled to be supporting this
initiative from GT Motive, supporting the UK Bodyshop Sector through such a difficult time.”
Graham Clarke – MD , Service Certainty
The National Body Repairers Association has published an open letter to work providers calling for increased COVID-19 terms.
Executive Summary
In response to the concerns expressed by many repairers about
the losses they are experiencing when supporting customers under Covid-19
conditions, the NBRA has considered the adequacy of the existing concessions made
by some work providers to the contract terms. As a result, we are proposing a
set of temporary changes to which we will be recommending repairers in order to
allow them to retain a small operating margin throughout this period, accepting
the losses already incurred.
Current Situation
Since 23rd March when Covid-19 social distancing
measures were increased, motorists have used their cars less, accidents have
decreased and repairers have found it increasingly difficult to stay open due
to low volumes, supply chain interruptions, and employee safety.
Up to 74% of repairers have since either temporarily closed
their doors or are operating a skeleton service, doing little more than
accepting instructions. The remainder of
repairers who decided to attempt to trade through the covid-19 lock-down are
arguably providing an essential service to both work providers who need
assistance for their customers and also to those “key workers” needing their
vehicles fixed in order to serve the public on lock-down.
However, it is clear that in most cases for these repairers
still trading, standard “contracted terms” are wholly insufficient to allow
them to break-even, let alone make a profit.
This should come as no surprise, as the model for repairers for many
years has been high volume / low margin, which doesn’t work with less than half
the normal volume of repair.
The industry has operated on sub 5% operating profits for
the past 25 years and therefore it is no surprise that very weak balance sheets
is the norm.
If a repairer is running below 60% capacity, they are likely
to be losing money as their marginal profits are not enough to cover fixed
costs (even with staff furloughed and the government paying 80% of their wages). Some repairers had been able to break even
due to work in progress and accidents that happened before the lockdown was
announced on the evening of 23rd March, but with the lock-down
measures extended to at least 7 May, much of this work has dried up.
Repairers are left with work volumes reflecting an accident
frequency that has reduced by between 70 and 90% and even then, many policyholders
are struggling to release their vehicle for repair or are worried about paying
the excess.
Work Provider COVID-19 support to Repairers
Work providers have offered a range of COVID-19 support solutions
to assist repairers with this situation and also to protect their policyholders
from infection. These range from
Covid-19 cleaning charges (for customer car and courtesy car) of between £0 and
£80, labour rate increases of between £0 and £7.50 per hour.
Some have recognised that the wholesale terms available on
parts to repairers have reduced and have accordingly reduced the parts discount
they require – this has been the most beneficial concession. This COVID-19 support, ranges from a benefit to
the repairer of between £10 and £166 per job with Allianz providing the
greatest support followed by Direct Line Group in our opinion. The average is
£90 per job.
Adequacy of COVID-19 support to repairers
The NBRA has worked with repairers to understand the true
cost of providing an essential service during Covid-19. This of course will vary from repairer to
repairer based on a number of factors: –
Proportion of work they have compared to fully
efficient
Cost of overheads
Whether they own premises or not
The ability to partially offset or reduce
overheads
The ability to furlough staff
The contracts and concessions received (as
mentioned above)
But if we use an example of a typical (real) repairer with
15 Technicians, running at 30% of normal volumes, who has offset his business
rates overhead and furloughed a proportion of staff, He is likely to be running
at a monthly loss of £16k or £326 per job (£12k or £245 per job with typical
Covid-19 support concessions)
At 20% efficiency (i.e. a repairer operating with 80% less
work than usual) this moves to a loss of £22k and £687 per repair (£20k or £606
per job with typical Covid-19 concessions)
Clearly these levels of loss are unsustainable especially as
the lockdown extends to at least 8 May and lots of uncertainty.
How could we address this?
If we accept that repairers are providing an essential
service to policyholders through this period, we also must accept that they
should not be required to operate at a loss.
Contracted rates together with existing work provider
concessions are falling way short of what is required for a repairer to
break-even let alone make a typical margin of c. 5%. We believe that the few who are trading
should be free at this stage to charge the rates necessary for them to make an
operating profit. It should be in effect
an “open market” with businesses setting their own rates and work providers
negotiating terms with their network on an individual basis. Though, we realise this would be disruptive
and generate a lot of unnecessary work and meetings at a difficult time.
A simpler approach would be for the NBRA to publish a set of
additional temporary charges applicable to repairs at this time that
genuinely would account for their lost margin and create a fair temporary
mechanism of “exceptional charges” during the Covid-19 period and perhaps
beyond. An element of this would be a
labour uplift accepting that labour cannot be as efficient during Covid-19 due
to distancing, but we accept this is a sensitive and emotive subject, hence it
being only a proportion of the mechanism.
Alternative approaches could be:- a) A temporary change to
GTA Rates b) A single “one off” Covid-19 charge of c.£400 or c) Direct cash
injection (similar to Progressive in US)
Covid-19 Charges
NBRA has engaged with a number of repairers throughout this
period to understand and calculate how their businesses have been
affected. The attached table (Recommended
Guide to Covid-19 Charges) provides a summary output of the differing charges
that will be required to allow trading repairers to operate on a solvent basis. NBRA would encourage repairers to use these.
Existing Underwriter Concessions
NBRA would be encouraging repairers to either stick with existing
underwriter concessions or replace them with the temporary Covid-19 charges
in (Schedule 1) below.
The Underwriter’s Challenge
NBRA understand that work providers are in no way to blame
for Covid-19. We also understand that
most will have incurred costs from getting employees set up as home workers and
more diversified work providers will continue to sustain significant losses in
other underwriting classes such as Travel and Business Interruption in addition
to Property from recent floods.
NBRA also understand that underwriters will be cautious
about spending extra on Motor Claims as there will inevitably be those who take
benefits from the Covid-19 situation and transform claims savings into price
reductions to gain future market share.
On top of all this there is a small risk of government intervention
diverting savings directly back to consumers.
Notwithstanding the above, Motor underwriters are expected
to make a conservative £1 billion in claims savings unexpectedly through
Covid-19 whilst the Repair Industry is looking at considerable losses and
closures.
NBRA has realised that it is almost impossible for
underwriters to step forward and offer the necessary terms repairers require at
the moment without fear of the above risks and losing competitive advantage,
even as we suspect, many wish to do more for their supply chain partners.
The Repairer Dilemma
Whilst many will complain, many repairers will concede that
they have a good working relationship with underwriters now and that improves
each year. Many repairers and repairer groups
are highly dependent on the relationships and do not wish to individually
create problems or damage genuinely good relationships. However, no business wishes to or should
attempt to operate at a loss. Doing so
over a prolonged period or remaining closed will be very damaging to an
industry that was recognising under-supply, underfunding and skills shortages
pre-Covid-19.
Example Repairer Model – (A real bodyshop’s numbers)
Recommended Guide to Temporary Covid-19 Charges (Schedule
1)
Charge
Value of charge to add
Rationale
Reduce Invoiced Parts Discount
by
10%
Currently repairers are not enjoying the discounts that they would
normally pass on to underwriters. This
is due to having to use suppliers that they don’t have agreed terms with and
in many cases having to pay up front as they have no credit in place. This has a value of approx. £75
Audatex uplift
£36
At 25% of normal volume, due to software charges being based on past
volume, Audatex cost per assessment has increased by £36
Disinfect cleaning of courtesy car
£20
Courtesy car out £10, courtesy car back again £10 (inc. materials)
Disinfect cleaning of customer car
£20
Customer car in £10, customer car return £10 (inc. materials)
Collection and delivery
£60
“Drive-ins” have reduced by 25 percentage points, plus C&D in
many instances has to be done by truck due to two drivers being unable to be
in the same car at once
Parts collection (where applicable)
£100
On ¾ of jobs. Based on cost of
(man + van + insurance + fuel) on 2 cases per day. (Or courier charge + 10% if possible)
Labour inefficiency Cocid-19 uplift
£4 / hr
Where staff are on site, they need to social distance and clean
vehicles as they hand over to other operatives, clean shared tooling. This
has a value of approx.. £68 on an average job
Mobility
£8 / day up to max 10 days
Whilst there are fewer jobs, lease car costs cannot be escaped. This is based on £8 a day x an average K2K
of 10 days (slowed due to Covid-19 challenges inc. parts). This has a value
of up to £80
Overhead Contribution
£100
Based on 25% of volume this is the remaining gap in contribution to
cover overhead costs not covered by the above individual changes
What jobs would this apply to?
Applies to any job instructed post 21st March
2020, but not yet invoiced up until end May. At which point this
will be reviewed.
Sliding Scale
NBRA propose that these temporary charges are
scaled back proportionately (to be shared separately) in stages as work volumes
increase based on data provided by Audatex on the percentage of claims
processed vs. prior year.
How will Work Providers react?
These charges have been considered not for “profiteering”
from the current situation, but simply as a guide to help repairers know what
to charge in order to trade at a modest net margin.
NBRA believes that it will be difficult for underwriters and
Engineers to argue with these charges which are reasonable and fair.
NBRA understands that some charges will be accepted, some
will be rejected. Where accepted NBRA
will be applauding the work provider and where rejected the NBRA will be
challenging the work provider for an alternative.
We do not believe that any repairer should worry or be
penalised in the future for asking what is essentially the minimum that any
trading business should ask for.
Timetable
Date
Phase
Detail
21 April
Work Provider Engagement
Share with work providers asking for commentary / feedback
22 April
Media Communication
Communicate what we aim to publish
23 April
Amendments
Make any amendments based on feedback
24 April
Publish Charges
Make charges available to repairers and recommend that they are added to repair jobs
After 4 years of working as an exclusive distributor and having successfully introduced the GT Estimate brand into the UK market, DAC holdings have agreed to redefine the relationship between themselves and GT Motive.
DAC Holdings will become
Jarvis Business Solutions Ltd. and also a GT Motive integration partner which
allows them to use GT Estimate as a fully integrated product within its Jarvis
workflow platform.
GT Motive UK Ltd. will take
back the direct distribution of all GT Motive products and solutions under the
direction of David Vella.
Both companies are committed
to bringing choice and innovation via alternative solutions to the UK market.
