By Bruce Adams, ABRN Correspondent
The insurance industry is keeping score on auto repair shops in its direct repair programs (DRPs). Shops that want to increase their business with them should know what items they are tracking and focus on improving performance in those areas, according to Pete Tagliapietra, business development executive with NuGen I.T. Inc.
“Several insurers are talking about performance measurement and ranking, which is consistent with their objective of reducing the number of shops they deal with,” Tagliapietra said at a seminar Wednesday morning called “More Cars Through the Door –DRP Self Management Best Practices.”
The insurers want to give preferred DRP shops as many cars as they can repair without negatively impacting the shop’s cycle times, he said. Most insurers expect a car to be worked on between 4.5 to six hours a day.
“This becomes critical because insurers want to manage rental car expenses and customer satisfaction index (CSI),” he says. “They don’t want the shop to take the car and let it sit in the back of the lot for two or three days before they work on it.”
Most insurers are advocating CSI as part of their DRP, he said. “Insurers know that CSI and policy retention are related, so they are often times requiring ongoing CSI reporting.”
The key performance metrics most likely to be measured include severity or indemnity; cycle time; alternate parts sourcing; estimating and repair compliance; CSI; repair vs. replace ratios; and supplement ratios.
“Each key metric has certain sub metrics that are salient,” Tagliapietra says. “For example, with cycle time, they want to know the projected delivery date and they keep score what percent of the time the vehicle was delivered as promised. Our statistics indicate that cars are delivered when promised less than 70 percent of the time.”
Insurers want shops to manage themselves while insurers measure the shops performance and make decisions based on those measurements.
“The self-management best practices concept is insurance driven,” he says. “It places more responsibility on the shops. The average shop spends almost five hours of time on administrative tasks related to DRP claims, which includes writing the estimate and providing all the information the insurance company requires.”