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Sunday, January 17, 2021
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Insurance: Dealing with the body blows

The worlds of bodyshop and insurance experts collide in a cracking Automechanika debate

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The COVID-19 pandemic has presented serious challenges to body shops. While some in the region were forced to close due to local restrictions, others remained open but had to deal new regulations and safety rules in what remains a largely physical occupation. On the other side of the fence are the insurance companies that work alongside them but are also having to make their own transition into the so-called low touch economy, where paperwork and practices become largely digitalised.

Frederik Bisbjerg, executive director, Digitalization, Daman National Health Insurance Company, says that everything in the low touch world we find ourselves has to now be filed digitally.

“I think it’s important especially with the way that insurers are working with their partners. Insurance companies and companies in general have become no touch and digital. Either they’ve taken whatever they do – their processes and paperwork – and made scanned copies and PDFs out of it. Basically, saying this is how we work now,” he explains. “Or, and this is more the difficult thing, but also the future-proof way of working, they’ve looked at how we push paper around today (with the approvals, the inspections and all these things) and asked how can we do this smarter? We have to add digital anyway because we have to we cannot have physical interaction anymore.

“And if you start looking at how you can work smarter or differently in the insurance company all of a sudden this reaches out not only to the customers but also to the partners. If we don’t need three approval processes and only one or maybe don’t even need one and can still have some automated rules to do this, you are changing the way your partners work.

He continues: “I’m sure many insurer company partners have experienced the insurance company saying hey we used to do this but now we have to do that, and, oh by the way, it is fully digital. It is quite an extensive change with the partners because all of a sudden they have to change their processes to accommodate the payer… the insurance company.”

According to Bisbjerg, while there are many different barriers to implementation to these two differing approaches, the biggest one is changing the corporate habits that have been entrenched over decades.

“They’ve been used to doing the same things for years: this is a paper process and we need a paper signature and this has to be approved by places, and so forth, and, all of a sudden when you digitise things or even start to consider the smartest thing, you also start changing people’s habits. Humans are very tightly connected with our habits. It’s difficult for us to change.”

He adds that having IT systems and infrastructure is a second challenge for removing the paperwork from the insurance claims business.

“Making sure that your it systems are capable of coping with the changes is the second art to this,” he affirms. “Many insurers because of their heritage and legacy are old companies. That means that they’re actually running on decades-old IT systems. And this is fine and they are still working, however, when you want to make changes it is a big challenge because everything is interconnected. So, even changing a button on the website may have impacts in the core system that you don’t know….Even these changes require analysis and it may take longer than then you will expect.”

Robert Snook, CEO of multi-award winning MSO body shop group CEO says that ultimately changes being made in the leading workshops and body shops is being driven by their customers.

“So the leaders are really taking on board what the customers are doing in their lives and thinking we need to follow the same path,” he begins. “This technology already existed before Covid-19, but traditionally insurers and body shops are not very good at change. It’s the customer dissatisfaction with the current process that drives to change.

“And as Frederick alluded to, going forward everything is connected to everything. The customers want to be connected to everything but they also want it to be personal to them. The insurers and body shops needed COVID to change our relationships. There aren’t many insurers happy with the way it works with body shops. Not every body shop is happy with the way it works with insurers. They needed enough pain in terms of the COVID-19 crisis, to overcome their inherent resistance to change.”

He pauses a moment to draw a finger to this forehead: “The first step is up here with changing your mindset and your approach and attitude towards needing to change.”

According to Snook, there are already clear winners in the race to be digitalised: “The winners are already done that that’s why they’re emerging as the winners.”

He continues: “I can tell you, there are a lot of body shops out there that are already achieving some surprising results because of COVID. They’ve stripped back all that over-processed fleshiness that they built up over the years since the pain of the past serious recession and they have come back to the golden nugget of the idea in the middle…and really started seeing some better performance in terms of lead time, key to key time, the approach with their customers; linking and communicating with their staff. They’ve come back to the core nugget of being a good body shop business. The insurers are seeing a much simpler process. Every time you have a piece of paper or you have an action or a step, someone needs to administer it and it just causes delays for the customer.”

“The customer got given the Old World claim management process. They didn’t choose it. They got given it and now we’re starting to reset and give the modern customers what they want which delivers what they get elsewhere in their life.”

Digitisation is having a profound effect on the customer experience across the automotive sector. Jihad Faitrouni, CEO, Aman Insurance says it is time for the insurance claim and repair process to be transformed in the region.

“Everybody is talking about how we can move from the old practices to the new practices. During my studying at MIT on the artificial intelligence, the first advice from our professor of AI said it is a tools created by people for people. From this definition, we can start thinking about our situation, our companies,” he muses. “The game is over. We cannot continue as before. We have to now act with different practices, especially when we talk about the new technology and see the impact of this technology on our business.”

Faitrouni uses the example of the health sector, and the way that it has had to galvanise both technological and human resources to find a solution for COVID-19 pandemic. The answer he says it’s not always about finding the right technological solution.

“It’s all about how can we convince our team and our end-users in order to accept these changes,” he explains. “Because it’s about a combination of parties – the company, the clients and the team – accepting together change.”

Aman Insurance witnessed a profound change in attitudes towards digitalisation during the first wave of the COVID-19 pandemic in the UAE with the online business growing from a share of 13% to 45% between March and September.

“People are now happy to get everything through online and have no need to spend any time outside the offices or their places because everything is fully integrated through their devices.”

He continues: “When we heard about the covid-19 Coranavirus for the first time if felt like it was a movie. But unfortunately this movie became a reality and we have to had act and to see how we can manage to protect ourselves and our team and our clients at the same time clients.”

While he recognises that the UAE took a rapid and robust approach to fighting the pandemic, Faitrouni, looks back on the events of the early months with misgivings on how some other governments and sectors reacted.

“Before covid-19, it was a completely different life for everybody. For us as an insurance company, it was like the best of life with no issues. No problems. After COVID-19, things are not as before. We have to think about how we live with it, especially now we are talking about a second wave. Our experience with the first wave it was very bad experience with many players and some countries the did not correct their health system. Thankfully, from day one the UAE government decided to take measures to protect our country.”

While the health sector has presented Aman Insurance with challenges this has contrasted with a quieter period for the driver and car protection operation. Particularly during the quiet stretches of lockdown.

“Nobody moved his cars. Nobody move from his home. And I can say we have a good loss ratio from the motor business.”

Returning to the theme of digitalisation, Daman National Health Insurance Company’s Bisbjerg says he feels the Middle East collision repair sector must take responsibility for getting itself up to speed with the digitalisation of insurance as well as keep pace with ever-more savvy customers expecting greater choice to drive down the amount they are having to pay for repairs and cover.

“This is a pet peeve of mine,” says Bisbjerg. “I’ve said this many times, but when I look at the collision repair body shop business as a whole, they tend to play the victims….like oh, it’s such a shame that the insurance companies are trying to cheat us and everything is such a big problem and we can do nothing…and I’m very much against this. It is my honest opinion, that if you want to build a business today and in the future – and you want to have a successful body shop – you have to embrace the facts that this is life. You cannot cry that insurers want to put pressure on prices.

“You cannot change it, right? Find ways of partnering with the insurance companies. Find ways of working with their digitalisation and find ways of saying, how can we how can we put our systems together so you can only work with us and be the best body shop in the world for you? This is the mentality that I so much wish we could instill into body shops because the mentality that I’ve that I have faced is very much…we don’t do anything. We just we just have to be priced pressured by the insurers. A drive from within from body shops who actually want to do digitalization, has not really been there. I wouldn’t say that that body shops in the Middle East are that advanced to be honest.

“I think there is there’s a lot of great opportunities for body shops to partner with insurers and despite the price competition they can build up quite a good and profitable business. But of course, it requires the change in mindset.

Speaking from within the body shop sector, Snook interjects: “I’ve always believed and said this every time that insurance and body shops must work together. The insurers are the paymaster and you’ve got to look up to the insurer. You got to make a deal with the insurer because on the other end you have a customer who is the body shop customer, but at the same time he’s

“Stuck in the middle and you’ve got to play the game. You’ve got to move on with the time. Otherwise, you’ll be closing your shop soon, and somebody else will be opening up.”

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Stephen Whitehttps://truckandfleetme.com/
Stephen White was formerly editor of Big Project ME.
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