The Northern Ireland Bodyshop Association (NIBA), in conjunction with the Auto Body Professional (ABP) Club, held a highly successful conference and Expo in Lisburn last month. The event was attended by bodyshop operators and many other companies involved in the Northern Ireland accident repair sector, as well as representatives from the Vehicle Repairs Association (VRA), the representative body for repairs in Republic of Ireland.

ABP Director David Cresswell spoke about the changes currently taking place in the UK insurance sector, noting how insurers are now writing business for profit rather than volume. He went on to point out that UK claims are currently down by in excess of 10% overall, with claims frequency reduced from 15% to 8%. This he argued was largely due to the fact that people involved in minor accidents were often not claiming on their policy due to high excesses. He also gave several examples of how common practices such as approved repair networks and steering work to these networks, was coming under scrutiny by official bodies such as the House of Commons Transport Committee and the Office of Fair Trading, while the practice of obtaining referral fees for personal injury claims is now to be outlawed. David went on to argue that the industry now had an opportunity to partly redress the balance of power with insurers, but that repairers needed to be proactive in contacting the investigating authorities.

Andrew Marsh of Auto Industry Insider, gave and enlightening address on the future of vehicle technology, with special reference to how reduced EU emission limits will mean bodyshops facing the challenge of more hybrid and electric cars.

Other speakers to address the conference included representatives of Audatex and the IMI, together with repairer Richard Hastings who introduced his customer, John McClinchey. John explained how he has twice taken on insurance companies in legal proceedings after they had refused to pay for repairs on his vehicle, because their recommended repairer had not carried them out. On both occasions John has successfully argued that the insurance companies are in breach of Section 18 of the 1998 Competition Act, which deals with abuse of dominant position in a commercial relationship and had his repair costs and expenses paid in full.  

Extract…

Question: What fraction of an insurance premium do repair costs account for?

Martin McRandall of Granite Insurance gave a very interesting breakdown of key insurance companies financial figures at the NI Expo. Based on his calculations, he estimated that on average 70% of claim payouts went towards personal injury claims, while 15% went on the insured’s vehicle damage and 13% on third party damage. He also estimated that at present, some two thirds of claims related to vehicles that were repaired and one-third on write-offs. Most interestingly, he estimated that of gross premiums paid on motor policies, only some 7.5% actually went towards the cost of vehicle repair, something that throws into question insurance companies seemingly endless obsession with reducing repair costs. He went on to suggest that if payments to repairers were to increase to allow for reinvestment and increased operating cost; the effect on premium costs to motorist would be very negligible