Relations between the collision repair and insurance industries continue to be strained, as repair shops wrangle with insurance companies over labor rates, repair strategies and customer steering, says a new survey commissioned by the Society of Collision Repair Specialists (SCRS).

According to the survey, 51.66 percent of shops said that concerns about suppressed labor rates dramatically impact their operations, while another 31.33 percent said this issue somewhat impacts their business. Steering ranked second on the list of concerns, with 40.66 percent of respondents saying it dramatically impacts their business, and 25.66 percent indicating steering somewhat impacts them.

Survey respondents were also asked to rate insurers based on the degree to which they contributed to these challenges. Progressive was ranked as the top contributor in six of the nine industry challenges being measured.

SCRS commissioned the study to confirm what the organization was already hearing from members regarding their issues with insurance companies.

“We’d received a lot of complaints about challenges in the industry. Although we’re working on those issues, it’s hard to sort perception from reality,” said SCRS Executive Director Dan Risley. “We knew what the issues were, but having a statistically valid measure helps us to determine what our priorities should be, so that we can formulate strategies to address those top two or three concerns that are most pressing for repairers.”

“SCRS’ Report on Repair Facility and Insurance Company Relationships” is based on a survey conducted by CSi Complete, a nationally known provider of customer satisfaction indexing, which specializes in the collision repair, claims and other service industries. A representative sample of shops from across the nation, including both DRP and non-DRP facilities, were polled with results ranked at a 95 percent confidence level. According to SCRS, in order to be statistically valid, the survey needed to include responses from more than 300 shops.

The survey focused on two areas: what issues impacted collision repair business, and to what degreee; and how participants perceived their relationships with thirteen major insurance companies. Survey participants were asked to evaluate the impact of nine pressing issues on their businesses. Impacts were classified four ways: “Dramatically Impacts,” “Somewhat Impacts,” “Little Impact” or “No Impact.”

“The results were revealing in that they confirmed what SCRS members thought all along,” said SCRS Chairman Farzam Afshar. “As an association, you like to think you have your finger on the pulse of your members and the industry as a whole. This survey helps prove it.”

“For example, we could tell the adequacy of labor rates was a concern from the vast number of bills being introduced around the country to address the issue,” Risley said. “The same is true of steering practices, which many states likewise have tried to address through legislation. Unfortunately, enforcement of such laws traditionally poses a challenge because hard evidence of steering is difficult to obtain, although we are hoping this may change as a number of collision repairers have begun to initiate lawsuits against insurers in an effort to show that steering cannot be tolerated.”

After labor rates and steering, the third highest-ranked industry concern is the lack of insurance field staff training, which 33.33 percent of respondents said dramatically impacted their business. “Depending on the insurance company, they may have very inexperienced field staff trying to dictate how the repair should be completed,” Risley said.

The other industry issues measured in the survey were database abuse/manipulation, insurers dictating repairs, refusal to acknowledge P-pages, DRP requirements, fear of reprisal or threats from insurers and desk reviews.

In terms of the insurance company rankings, Progressive was ranked the most troublesome by respondents in the labor rate, steering, field staff training, database abuse, insurer dictating repairs, and P-pages categories.

“That’s definitely an indication that we as an industry need to spend more time speaking with Progressive,” Risley said. “They don’t participate in the Collision Industry Conference, and they need to have a presence. We need to reach out to them more frequently.”

In the suppressed labor rate category, Progressive was listed by 20 percent of respondents as having a dramatic impact on that issue, followed by Allstate (17 percent) and State Farm (13 percent). Progressive also topped the steering category (23 percent), followed by Allstate (19 percent) and GEICO (14 percent). Progressive topped the field staff training category by an even larger margin (39 percent), followed by GEICO (13 percent) and Allstate (11 percent).

Allstate ranked as one of the top three contributors in eight of the nine categories, while State Farm ranked in the top three in five of the categories.

According to Risley, SCRS hopes to use this data to open up a dialogue with the insurers to help address some of these problems. “We’ve never been an association that tries to spurn the insurance industry,” he said. “We want to interact with them in ways that are beneficial to everybody. We need to reach out to them to see how we can address some of these problems.

Now that the results are in, Risley says that SCRS will use the data to help the industry formulate strategies for dealing with these issues. “For example, there have been several pieces of labor rate legislation introduced at the state level,” he says. “One thing we’re doing is having the legislative committee gather data on what states have existing laws, and which ones have bills under way so we can develop recommendations based on the most effective bills. We can also share data with the insurance commissioners to open up a dialogue and come up with some resolutions in partnership with them.”

Additional data on repairer-insurer relationships will be released later in the week.