The Northern Ireland Bodyshop Alliance has launched a new report that says insurance giants are using their might unfairly to keep bodyshop profits low.

NIBA said it has evidence that that many of its members were being asked by insurance companies to take on repair work at rates as low as £24 per hour, much lower than the £33 per hour required to cover its member’s basic running costs. NIBA said the findings of its independent cost survey report showed that labour rates for repairing cars involved in accidents offered by certain insurance companies were now almost 30% below the breakeven point for bodyshops.

Sean Bradley, Chairman of NIBA, said: “This is a ground breaking report. For the first time, we have an independent report which highlights the actual costs of running a bodyshop in Northern Ireland. The report puts this figure at £33.46 per hour.  Insurance companies, which represent around 50% of an average bodyshops turnover, have kept the rates artificially suppressed year after year and some have even cut the rate to around £24 per hour.  It is clear that this is not a sustainable rate.”

Sean added, “We feel that extremely unfair practices are rife in the industry and we are calling on Stormont to look into these issues.  The insurance industry cannot continue to make large profits at the expense of keeping Northern Ireland repairers profitability low, or indeed non-existent.”

Sean drew parallels with the recent protests held by farmers against supermarkets. He said, “The multinational companies are putting pressure on the small independent business to cut their prices.  This means that repairers cannot invest in the equipment and staff training which is required to keep up with modern vehicle technology and safety requirements.”  He added “Insurers say that any increase in repair costs will have to be passed onto policyholders.  The reality is that only a very small proportion, around 10%, in premiums goes towards the labour cost of repairing the vehicle”.

The independent survey was conducted by Keith Browne & Co, Chartered Accountants who had carried out a similar exercise for The SIMI.