Page 12 - Australasian Paint & Panel Nov-Dec 2018

IN DEPTH
INSURER SCRUTINY
Insurers have been in the spotlight recently with a Royal Commission and a parliamentary inquiry in Western Australia.
THE ROYAL COMMISSION into misconduct in the banking, superannuation and financial services industry turned its attention to the insurance industry in September. Despite many submissions about car insurance and the body repair industry, there was no questioning of insurers in this specific area. However, the admission of misconduct from insurers is likely to lead to some changes in legislation regarding insurance in general which should also include motor insurance.
Meanwhile, in Western Australia the parliamentary Economics and Standing Committee is deliberating submissions and evidence given during its inquiry into WA’s Automotive Smash Repair Industry. MTA WA has proposed that the Code of Conduct become mandatory in WA, as it is in NSW.
The MTA WA reported that it had put an
enormous amount of work into the inquiry
including having the committee attend the
MTA WA so that they could conduct in-camera
hearings with autobody repairers. These
business owners felt that they would be
discriminated against by insurers so that
MTA WA had to ensure the confidentiality of
the evidence provided and these are
therefore not in the public domain. To ensure
that the MTA submissions were balanced, information from both members and non-members was collected.
There is a great deal of interest in the public transcripts of the insurer interviews as they tackle many of the prevailing industry issues. Some excerpts from IAG and Suncorp demonstrate this. Rob Bartlett from Suncorp was one of three insurers giving evidence. IAG and RAC WA were the others and you can download the transcripts at parliament.wa.gov.au.
Bartlett stated that Suncorp has 13 audited and approved recommended repairers in Western Australia. He explained to the committee about Suncorp’s relationship with Capital
12 PAINT&PANEL November / December 2018
S.M.A.R.T. and stated that 55% of work in WA is carried out by S.M.A.R.T. The chair asked about the cost of repairs inquiring if ‘smash repairers are being driven to the absolute least cost and, in some respects, below‐cost pricing and that is being driven by a power imbalance”.
Bartlett said: "I think we do have a responsibility to our customers to make sure that pricing in the market is fair and reasonable... and we do not just take whatever price is put to us. We also do need to consider the repair methods being proposed
– whether they are actually over the top, whether or not there are simpler, more efficient methods."
IAG was questioned about choice of repairer and how it handles customers who may wish to use a certain repairer and its policy
on lifetime guarantees. It was represented by Steven Fitzpatrick, executive general manager. Fitzpatrick explained that IAG has a 20% slice of the car insurance market in WA and has around 36 approved repairers. When quizzed about choice of repairer Fitzpatrick said: “So, essentially, customers
have choice across pretty much every single policy that we have, like SGIO and so forth. There might be a small difference in terms of Coles around buying a choice policy, but generally, yes, they can choose where to take their repairs. Therefore, if they choose to take it to any smash repairer, we will assess the vehicle to make sure it has been done to the right level of quality, make sure it is the right method of repair, make sure the costs are fair and reasonable, and we would authorise the work.
“Ultimately, the customer has choice,” he said. Repair times, Funny Time, Funny Money, The Code of Conduct and IDRs were also discussed.
“When quizzed about choice of repairer Fitzpatrick said: “So, essentially, customers have choice across pretty much every single policy that we have”
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