CCC Acquires UK Insurance Division of Carter and Carter-Phil Carter Will Join CCC to Lead European Initiative
CCC Information Services Inc. announced June 25 the acquisition of Carter and Carter’s United Kingdom insurance division. Called CCC International, the new subsidiary will be the launch point for CCC’s European initiative. Phil Carter, founder and managing director of Carter and Carter Limited, will become the managing director of CCC International, joining the CCC Information Services Chicago-based executive management team.
According to Carter, "We believe our current client base and knowledge of the European claims process will be instrumental in effectively introducing CCC’s value-added software, information and processing tools into this market."
CCC plans to launch a range of estimating and claims outsourcing products with Carter and Carter’s existing strategic partners in the automotive claims environment.
"I am really eager to get the European initiative underway," said David Phillips, Chairman and CEO of CCC. "We’ve spent the last 18 months evaluating the European market and decided to focus first on the UK opportunity. This market, we believe, will be receptive to the fundamental change represented by our products and technologies."
As long time readers of INSIGHT are aware, the UK market has several insurers who operate DRPs and referral networks. Undoubtedly, CCC believes these operators are prime candidates for connectivity and claims management programs as well as estimating products used by U.S. insurers and collision repair facilities.
Ford Motor Company, Republic Industries Partner In Rochester Retailing Initiative
Ford Motor Company and Republic Industries, Inc. announced June 19 that they have reached an agreement in principle with Ford and Lincoln Mercury dealers in Rochester, New York to establish a Ford Retail Network (FRN) in that market.
Eight dealers, operating nine retail outlets are involved in the venture. Eight of the retail outlets sell Ford brand products, and one is a Lincoln Mercury dealership.
The Rochester dealers are currently examining their level of participation in the ownership and operation of the venture.
The FRN approach to selling cars and trucks will include unique sales and service outlets, supplemented by neighborhood service centers providing competitively priced service to customers.
The sales centers will feature a large selection of both new and used vehicles, no-haggle selling and salaried sales consultants.
Neighborhood service centers will enhance the vehicle service process with extended hours for maintenance, warranty and light repair work performed at convenient locations.
Other Ford Retail Network ventures have previously been announced for Tulsa, San Diego and Salt Lake City.
Earl Scheib Announces Improvements in Operating Income for Fiscal 1998
Earl Scheib Inc. announced July 14 financial results for their Fiscal Year of 1998 ended April 30, 1998.
Operating income for Fiscal 1998 increased $924,000 from an operating income of $97,000 in the fiscal year ended April 30, 1997 to an operating income of $1,021,000 for Fiscal 1998. Operating income excludes interest income, gains and losses from the sale of real estate and fixed assets, and income taxes.
Net income was $1,064,000, or 22 cents per share, for Fiscal 1998, compared with net income of $1,102,000, or 23 cents per share, for Fiscal 1997. Taxes were nominal in Fiscal 1998 due to the use of the company’s remaining net operating loss. Fiscal 1998 had gains from the sale of real estate of only $33,000, compared with $893,000 in Fiscal 1997.
Comparable shop sales (shops opened more than 12 months) increased by 6 percent for the fiscal year. Management believes the increase resulted from numerous factors, including the introduction of the new Earl Scheib-manufactured, state-of-the-art paint called EuroPaint; improvements in shop operations; the quality of the company’s service; and business from the company’s new corporate fleet business.
This increase in sales was obtained even though expenditures for advertising were down $819,000, compared with Fiscal 1997. Dan Seigel, the chief executive officer and president of Earl Scheib, said: "We are pleased to report this dramatic improvement in operating income. This improvement was obtained despite difficult weather towards the end of the fiscal year."
Earl Scheib, founded in 1937, is a nationwide operator of 163 auto paint and body shops located in 140 cities throughout the United States.
Caliber Acquires Three Facilities
Caliber Collision Centers announced three separate acquisitions in late June and early July. On June 24, Caliber announced the acquisition of Brown and Brown Body Shop Inc., located in Denton, Texas.
Established in 1958, Brown and Brown Body Shop is a 14,000 square-foot facility that provides foreign and domestic paint and collision repair and factory precision unibody repair.
On July 6, Caliber announced the acquisition of Auto Body Unlimited located in Mission Viejo, CA.
Established in 1981, Auto Body Unlimited is a 16,000 square-foot facility. Former owner Rick Reiss, a past president of the California Autobody Association, will assist in the transition of the facility to a Caliber center and then assume a corporate development role with Caliber.
Diane Reiss, who co-founded Autobody Unlimited with her husband, Rick, will remain with the center as its office manager.
On July 9, Caliber announced acquisition of Automotive International Body Repair located in San Juan Capistrano, CA.
Established in 1980, Automotive International is a 28,000 square-foot facility. Current shop manager, Terry Lynch, will continue as the center manager for Caliber.
A.M. Best Reports Q1 Property/Casualty Results Strong
A.M. Best reported June 9 that the U.S. property/casualty insurance industry’s earnings remained strong in the first quarter, driven by better-than-expected underwriting results and sizable capital gains realized on investments.
The industry’s reported combined ratio, which measures overall underwriting profitability, was 100.3-nearly 1 point better than in the same period last year.
"Underwriting performance has been steadily improving, driven by improved loss costs in personal auto and workers’ compensation, lower catastrophe losses and modest asbestos and environmental reserving," said Jeanne Dunleavy, a vice president in A.M. Best’s property/casualty division.
However, the first-quarter results were helped by the mild winter and modest weather-related claims.
According to Dunleavy, "A.M. Best expects the combined ratio to deteriorate in the second quarter as a result of severe spring storms in the Midwest and the Southeast."
Despite the exceptional first-quarter results, A.M. Best maintains its original estimate that the combined ratio will deteriorate to 104.8 for the full year 1998. This projection anticipates a return to historically higher catastrophe losses, less favorable reserve development, pricing declines in many standard commercial lines and the high cost of upgrading technology to compete.
Premium growth was sluggish, at 2%. However, policyholders’ surplus grew 6% from year-end 1997 due to favorable underwriting results and strong financial markets. Unrealized capital gains were "a remarkable $14 billion" in 1998, compared with $1.2 billion in 1997’s first uarter, Ms. Dunleavy said.
Berkshire Hathaway Inc., the parent of GEICO, and State Farm Group, which hold more than 40% of the industry’s unaffiliated common stock, have benefited from the strong equity markets. At the end of the first quarter, Berkshire Hathaway, with $41 billion in policyholders’ surplus overtook State Farm’s leading position as the largest property/casualty insurer in terms of surplus.
Overall, the industry’s capitalization has increased, fueling greater competition and merger-and-acquisition activity as insurers seek to deploy their excess capital. Recently announced mega-transactions include the proposed merger of Nationwide Mutual Insurance Co. and Allied Group Inc. and GRE Insurance Group’s acquisition of ING Group’s U.S. property/casualty operations.
ADP Dealer Services Names Mike Martone President - Herman Leaves Claims Solutions Group
The ADP Dealer Services Group announced the appointment of Michael Martone to the position of President on July 6. Martone will continue to have responsibility for ADP’s Claims Solutions Group, based in San Ramon, Calif., where he has served as President since 1995.
INSIGHT has also learned that Marc Herman, a senior vice president with ADP’s Claims Solution Group has left the company. Herman has been an active member of the collision repair industry for many years representing ADP. No word at press time on a successor to Herman.
I-CAR, and Gold Class Receive Cable TV Exposure
I-CAR’s Gold Class program received national attention on cable television at the end of June. Unlike most Saturday afternoon auto repair shows that are geared towards the do-it-yourself market and poorly treat collision repair subjects, this effort stands apart.
On Saturday, June 20th and Sunday, June 21st, the Shadetree Mechanic episode Modern Automobile Body Repair aired on The Nashville Network (TNN). The episode took viewers on a guided tour of a state-of-the-art facility to show how complex the collision repair process is today.
The show emphasized that it takes trained technicians to properly repair a collision-damaged vehicle and explained what the Gold Class Professionals designation means and how it benefits consumers.
Production took place at Tennessee Collision Repair, a Gold Class facility in Alcoa, TN. David Maples, co-owner of Tennessee Collision Repair, appeared throughout the episode. To order the Shadetree Mechanic video, call (800)544-8485 and ask for episode #ST7-05. The cost is $15.95 plus shipping and handling.
October PRIDE Month Draws Near
The National Auto Body Council (NABC) is gearing up for PRIDE Month, slated for October, that report in last month’s INSIGHT.
Sponsored by the NABC, PRIDE Month is being designed to promote and draw attention to the positive aspects of the industry and its people through interaction with each other and with consumers.
The NABC is coordinating special projects and PRIDE kits that will include items promoting the event such as Pride lapel pins, Pride golf T-shirts, a Pride poster, a press release for shops to issue to their local newspapers and radio stations, and more.
Shops, insurers, and vendors are being encouraged to participate in one or more of the suggested special events such as a community open house, a visit to the local schools, or a special safety program for a local community organization.
Plans for these and other suggested programs will be included in the PRIDE kits, which go on sale in mid- August.
phone (888)66-PRIDE.
INSIGHT Launches Internet Survey Center
INSIGHT is adding on-line survey capabilities to its popular web site. INSIGHT subscribers, who already enjoy daily news updates through the password-protected section of the INSIGHT website at www.collision-insight.com/news, will be able to view results of INSIGHT TrendLine and Market Watch surveys on-line. In addition, subscribers will be able to participate in new surveys directly through the survey center.
This month’s TrendLine survey (See chart at right) shows healthy volume increases for most respondents across the country. Average reported RO volume increased 8.8 percent across the U.S. in June. The average annual sales of respondents totalled $1,750,000.
This month’s survey also covers the use of printed estimating guides. While many may think book usage declined, fully 92 percent of computer system users have printed guides to assist them with quick labor time reference the most common usage.
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