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Collision Industry Conference committee working on new 'cycle time' formula

Thursday, January 14, 2016 - 09:00
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At the Collision Industry Conference (CIC) in Las Vegas in November, a CIC sub-committee announced that over the coming year it will work with any interested insurers on developing a new formula for estimating cycle time (or “length of rental”) on initial repair estimates.

A panel discussion at CIC in 2014 focused on the challenges currently posed by the wide-ranging formulas some insurance companies use (or require direct repair shops to use) to determine length of rental, some of which set unrealistic expectations for consumers. The committee cited examples of formulas that various insurers require shops to use to list an expected delivery date on the initial estimate; they ranged from one day for every three hours of labor on the estimate to one day for every six hours of labor on the estimate. If the insurers’ goal is to drive performance, one panelist said, that’s one thing, but when it establishes unrealistic expectations for the consumer, and requires multiple adjustments to completion date information by the shop and rental car company, that impacts efficiency and customer satisfaction.           

At the Las Vegas meeting, Pat O’Neill of the CIC Insurer-Repairer Relations Committee said some insurance companies – he named only Allstate – were planning to work on a new formula, so the committee “felt it would be very important that as an industry we had input into that and were able to participate in whatever that outcome may be.”       

O’Neill said the sub-committee welcomes involvement by insurers or any others; those who have confirmed participation include Darrell Amberson of LaMettry’s Collision in Minnesota, Mike LeVasseur of ABRA Auto Body, Frank LaViola of Enterprise and Aaron Schulenburg of the Society of Collision Repair Specialists (SCRS). O’Neill said the goal would be to develop an alternative formula by the end of 2016 that could be tried by some insurers, but he cautioned that the sub-committee can only offer input on the subject.

“This doesn’t mean that the result that might come up at the end would be something that CIC would completely condone, but I think it behooves us to at least be involved in what might be something that we’re going to have to deal with,” O’Neill said.

Are parts procurement systems helping?

CIC’s “Parts and Materials Committee” throughout 2015 focused on the role that electronic parts procurement does – or could – have on improving shop and parts vendor efficiency. At the meeting in Las Vegas, long-time CIC participant Frank Terlep (now with Summit eMarketing Sherpas) questioned – somewhat rhetorically – how much the systems developed over the last 15+ years have actually benefitted any segment of the industry.  

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