George Avery, claims consultant for State Farm Insurance, and Rob Cooper, chief executive officer of PartsTrader, faced their critics at the Collision Industry Conference July 17 in San Antonio.
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Collision repairers were loud and clear in voicing their displeasure with the State Farm pilot parts procurement program based on the PartsTrader platform. About 20 industry members spoke against the program.
Avery kicked off the CIC Parts and Materials Committee meeting by summarizing and defending the pilot program.
“We give $3 billion to purchase parts (every year),” Avery said. “We handle 35,000 claims per day. We are a mutual company, which is owned by the policyholders. We have a moral and legal obligation to make sure that money is spent in a prudent manner. We are not interested in short-term gain for our customers. We are interested long term for our customers.”
Avery said that State Farm did not expect a dramatic decrease in cost of repair or dramatic changes in cycle time. He said that State Farm is not a company that routinely asks repairers for discounts on repairs.
“We did not expect open arms,” Avery said. “We know change causes ripples. We know we are getting into your business. However, in a previous test with OEConnection, we maintained the repair facilities parts margin. We know how important that is.”
Avery said that after putting out a request for proposal and selecting PartsTrader, they spent over a year developing the format. “We asked repairers, dealers and suppliers to help us build this tool, and they did. We just concluded our feedback phase last week with repairers and are evaluating that now.”