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Time to open up the market

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Over the last two years the South African Motor Body Repairers’ Association (SAMBRA), has been lobbying hard to remove restrictive Insurer Supplier Panels and OEM approval programmes, which effectively preclude consumers exercising their right of choice and damages small business’ who have spent years building up their loyal client base.

Richard Green, National Director of SAMBRA says with the industry still reeling from the impact of Covid-19, there is no better time to open up the market.  “SAMBRA has always been one of the strongest advocates for a free market strategy as well as the entrenchment of client’ ‘right of choice’ of service provider,” says Green.

Green says we have to create a more inclusive market by opening up access to insurer supplier listings and Original Equipment Manufacturers (OEM) approval systems in order to remove barriers to entry for any and all qualifying applicants.

Insurers have, and still do, largely dictate where repairs can be carried out and some motor manufacturers still restrict the number of approved Motor Body Repairer (MBR) facilities that can obtain their approval. Both Insurers and OEM’ have long maintained that restricting numbers is necessary due to the size of the available market for repairs. SAMBRAs view is that it is the responsibility of each MBR business to market and service its customers and thereby grow and prosper – it is not the Insurer or OEM’ responsibility to ensure sufficient work flows to their ‘chosen few’.

More inclusivity

“Whilst SAMBRA has managed to convince most major OEMs of the need to be more inclusive in their approach to their manufacturer approval systems, unfortunately almost all short term motor insurers still practice an extremely restrictive supplier base choice and this is simply not sustainable,” says Green.

He says the net result of these restrictive insurer and manufacturer panels is that small businesses in particular, that are fully compliant with set standards, find themselves being precluded from accessing business just because the Insurers and manufacturers say they have sufficient suppliers in an area.

SAMBRA argues that surely if the business is prepared to accept the investment risk and comply with accreditation criteria set by Insurers and manufacturers, it is a restrictive business practice to preclude them from servicing customers. Current businesses, that have in some cases spent 20 to 30 years cultivating loyal clients, are suddenly precluded from doing so simply because the MBR business cannot obtain manufacturer approval or access an Insurer supplier listing.

Right of Choice

The issue of right of choice is so important. “We need to eliminate work allocation control by Insurers and even more importantly their intermediaries and allow service and quality records to determine which Motor Body Repairer customers wish to utilise. More transparency will create a fairer market and facilitate consumer choice in relation to motor body repairs. At present the insurers preclude the customer from making that choice by the introduction of commonly used ‘road blocks’ such as indemnity forms and threats of zero support post repair,” says Green.

An olive branch

During the first couple of months of lockdown the MBR sector welcomed alternate payment and fee arrangements by insurers who were sensitive to the cash flow risks being experienced by the sector. “This has shown us that collaboration is possible. The market has changed dramatically and it is definitely time for a new set of rules which can open up the market and help retain jobs.

Consumers are also under severe economic pressure and there is no doubt that the time for insurers to advise consumers, in clear and explicit terms, that they have a right to have motor-body repairs, to their vehicles undertaken by a service provider of their choice, is now,” concludes Green.