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Consolidation will not cure all industry problems, insurers say

Friday, October 12, 2012 - 23:06
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George Avery of State Farm, Robert Knott or Nationwide and Randy Hanson of Allstate discussed industry consolidation, technology and future trends during the Collision Industry Forum insurance panel discussion Oct. 12 at NACE. Dan Stander of Fix Auto Highlands Ranch in Littleton, Colo., moderated the discussion.

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The insurers agreed that consolidation is a trend affecting both repairers and the insurance industry itself. The recent growth of several large multi-shop operators (MSOs), such as The Boyd Group, ABRA, CARSTAR, Service King and Caliber Collision; as well as the growth of smaller regional MSOs has been well documented and noticed by insurers.

“MSOs that can replicate quality procedures are attractive as a group,” Avery said. “Using a score card to rate MSOs across the board represents an interesting opportunity. But just like independent shops, they must perform to stay on our system.”

But there also are downsides to the growth of the MSOs, they said.

Knott said that some of the regional MSOs need to make sure they don’t grow too much in a specific market. “MSOs have several challenges, such as oversaturation in a market and growing too fast.”

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