Your Source for Up-To-Date News and Research on the Collision Repair Industry
click here to subscribe to the FREE INSIGHT Editor's Desk News Alert Email
SUBSCRIBERS-ONLY
Today's News
Industry Stocks
INSIGHT This Month
INSIGHT Archives
Survey Center
Letter to the Editor
Business Tools
Subscription Information
CSI Reporting
Financial Analysis
IRS Audit Guide
Management/
Technical Info
Market Watch Rates
INSIGHT Inside this month's issue...
Feedback
Letter to the Editor
This article originally appeared in the August 2001 Issue of INSIGHT
©2001 Collision Repair Industry INSIGHT All Rights Reserved
Developments at the July CIC Meeting
Autobody by Caldwell to Remove Its Name from Price-Fixing Suit
PPG Receives National Environmental Award
Ford Exiting Auto Dealership Business
ADP Introduces Open API Partner Program for Elite Dealer Management System
CAPA Website Offers Public Access to CAPA Procedures and Parts
A.M. Best Reports Property/Casualty Premiums Show Strong Growth
BASF Coatings and DaimlerChrysler Sign Cooperation Agreement for Glasurit and RM
GM's Goodwrench Chooses CSi Complete for CSI Needs
Flood Damaged Airbags Likely in Wake of Tropical Storm Allision
Akzo Nobel Launches Powder Coatings Business Unit
Mitchell and Travelers Launch Internet-Based Auto Glass Claims Assignment and Processing System
Local Investor Group Forms North Texas Insurance Auction
INDUSTRY UPDATE
The non-OEM sheet metal parts that were rated poorly in the latest CIC parts demo were CAPA-certified – sort of. The left and right fenders, manufactured by TKY and installed during the July meeting in Baltimore on a 1998 Nissan Maxima, were rated acceptable by fewer than 20 percent of CIC participants.
CIC Parts and Airbag Committee Chairman, Rod Enlow, explained that the parts were certified by CAPA under its previous review process. But both had more recently failed CAPA’s more stringent vehicle test fit process, and the manufacturer is in the retooling process. However, no recall was made and the parts continue to be sold to shops.
Also, the CIC Insurance and Operations Committees are working in conjunction on a matrix showing administrative and other shop requirements for various insurer direct repair programs (i.e., which companies require four photos versus six, etc.).
INSIGHT’s Charlie Baker, Chairman of the Operations Committee, said the goal is to determine how the programs differ in terms of requirements for shops in hopes of encouraging insurers to see the benefits of moving towards more standardized direct repair claims processes.
During the Write It Right Committee report, Tom Holmes, a multi-shop owner in California, provided a preview of a guide his business is helping create to the types and amounts of body materials used in various repair or replace procedures. Holmes believes that by establishing what is in basic "body materials kits" for a panel replacement, for example, the system will help improve shops’ ability to track usage, document body materials for billing purposes, and "remind" technicians of all the necessary steps in the procedure.
The Anti Fraud Committee produced a set of guidelines to benefit the entire industry. CIC requests that all responsible entities – insurers, repairers, adjusters, and vendors endorse and adopt these common sense practices. The "Anti Fraud Guides for Ethical Business Conduct" states that all parties of the claims/repair process should:
- Never intentionally misrepresent any information in the claims/repair process
- Disclose all information that they have a duty to be made known
- Never conspire with anyone in the claims/repair process to defraud or cheat anyone
- Never accept anything in exchange for acting against the best interest of their employer or to compete unfairly with the employer’s competitor
- Always fulfill agreements made and not hinder any parties from completing their agreements
- Be absolutely clear as to the authority they possess
- Never engage in the practice of cost shifting
- Clearly communicate with all parties involved during claims/repair process
- Maintain documentation to support all actions in the claim/repair process.
Autobody by Caldwell Inc. of Laguna Hills, California, the only named plaintiff in a lawsuit filed in June in federal court against the world's largest paint makers, is removing its name from the suit, according to owner Kevin Caldwell, former head of the Collision Division of national organization ASA.
The suit, claiming paint makers have engaged in price fixing, alleged that repair shops paid "artificially inflated prices" for refinishing products and requests money damages and an injunction barring collusion. It also seeks class-action status to include other auto body shops.
Caldwell said his decision, which he discussed while attending the July CIC meeting, came after careful review of the complaint. Caldwell says he realized that his situation relates to his concern with only one specific paint company rather than to the issue of industry-wide price-fixing.
The U.S. Environmental Protection Agency has recognized PPG Industries with a Green Chemistry Challenge Award for its breakthrough discovery in lead-free anti-corrosion coatings for the automotive industry.
EPA's awards recognize outstanding accomplishments in research, development and implementation of technologies that reduce pollution. An independent panel selected by the American Chemical Society chooses recipients.
PPG was cited in the designing safer chemicals category for primers that provide automakers with substantial environmental and energy cost benefits. Automakers' acceptance of PPG's new lead-free product, the first to outperform leaded coatings in corrosion protection, will eliminate about 1 million pounds of lead from primers on an annual basis.
Ford Motor Co. has announced it is selling seven auto dealerships in Oklahoma and plans to pull out of the U.S. dealer business altogether, to appease dealers upset about competing against the automaker.
Ford said it had agreed to sell all seven of its dealerships in Tulsa, Oklahoma, to UnitedAuto Group, the second-largest publicly traded U.S. auto dealer. Ford spokesman John Ochs said another 23 dealerships in New York, Oklahoma and Utah would be sold separately once buyers are found.
Ochs said the company decided to sell after a series of recent meetings between dealers and Ford Chief Executive Officer Jacques Nasser where dealers called for the sale. "Dealer relations are a priority," Ochs said.
The dealerships were part of Ford's controversial Auto Collection experiment, where Ford consolidated most or all dealerships in a market and owned them jointly with dealers.
Detroit's traditional Big 3 automakers have worked for the last several years to consolidate their U.S. dealer networks to cut distribution costs and better control how their brands are sold. Distribution expenses make up about 30 percent of the cost of a car.
But efforts to buy up dealerships have sparked howls of protest from dealers, who see factory-owned stores as a threat. General Motors Corp. backed off plans to purchase up to 10 percent of its dealers after a near revolt by dealers. Those efforts have also been blocked by many states that bar automakers from owning dealerships.
Ford had also backed off its original plans to establish collections in many cities, but had also said it would hold onto the current collections and use them as test beds for new sales techniques. The automaker sold its interest in a dealership group in San Diego, California, in December of last year, however.
The Tulsa collection was the first, formed by Ford in 1998 from eight stores that sold about 20,000 vehicles a year. Ford bought a majority stake in the collection from the dealers in 1999. Ochs said Ford hoped to find buyers for the other dealerships within a few months. He said all of the dealerships were profitable.
UnitedAuto Group, Inc.,a member of the FORTUNE 500, signed a letter of intent to purchase the Tulsa Auto Collection. Jim Evans, the dealer operator who currently manages the Tulsa Auto Collection will participate in the acquisition with the company, and continue to run the operation for UnitedAuto.
The Tulsa Auto Collection consists of seven dealerships representing the Ford, Lincoln/Mercury, Jaguar and Mazda brands. In addition, the company operates two Quality Car Care service centers and two used car facilities. The completion of the transaction is subject to customary conditions.
Roger Penske, UnitedAuto Chairman, stated, "We are excited about the opportunity to partner with Jim Evans to acquire these dealerships. Tulsa is a strong market and Ford has built a solid, customer-focused organization to represent its diversified portfolio of brands. UnitedAuto will be well positioned to capitalize on the momentum Ford has created in the Tulsa market, and we are pleased that our partners at Ford Motor Company chose UnitedAuto Group for this unique opportunity."
UnitedAuto, which has pursued a strategy based on internal growth from its existing dealerships, as well as from strategic acquisitions, operates 123 franchises in 19 states, Puerto Rico and Brazil. UnitedAuto dealerships sell new and used vehicles, and market a complete line of after-market automotive products and services.
The Dealer Services Group of Automatic Data Processing, Inc. has announced Elite(TM) Open API, a powerful technology enhancement that significantly expands the capability of ADP's industry-leading Elite Dealer Management System.
At the center of the technology is the Open API (applications programming interface) Partner Program, a developer-friendly application framework which enables select partners to quickly and seamlessly interface their Internet, Windows®, or Unix based applications and systems to the Elite Dealer Management System, using an industry standard interface. The Open API Partner Program sets a new standard in the integration of third-party applications, business-to-business, and business-to-consumer transactions focused on the automotive retail market place.
"The ADP Open API Partner Program provides us with real time, high speed, secure, bi-directional access to the Elite system. From the developer's point of view, we have access to ADP's technical resources to ensure that our integration does not jeopardize the integrity of the Elite system. For our customers we can seamlessly synchronize the CRM database and the Elite database. We are essentially creating one integrated database," says Malcolm Thorne, Chief Executive Officer of Automotive Directions.
Prospective program participants are required to go through a meticulous qualification process in order to achieve ADP certification. Upon becoming certified, program partners are authorized to use ADP's robust interface library and software developer's toolkit, creating the potential for hundreds of new applications and decision support solutions.
"There are many software and web-based companies that have valuable applications and services which help our mutual clients solve critical business problems. We bring significant value to both our clients and partners by enabling secured data exchange in comparison to the many hostile interfaces that are out there. Elite Open API accelerates ADP's solutions-oriented strategy in helping our clients take control of their dealership operations, which we debuted earlier this year at NADA," said Kevin Henahan, Vice President of Product Marketing for ADP Dealer Services.
Key components of ADP's Open API Partner Program include partner technical training and assistance, a secure test environment, and access to important time-sensitive product information through ADP's DealerSuite Internet destination.
"We have had great response to the program from the software development community across the U.S. and Canada," states James Beveridge, ADP's Open API Program Manager. "Elite Open API program is based on industry standards established by companies like Microsoft, IBM, and W3C, which means the architecture is truly open. For the automotive retail market this means a better way to access data. Our Open API Partner Program may be expanded to include ADP's next generation Dealer Management System. Our clients are given more choices because applications are now integrated into the ADP Dealer Management System."
ADP Dealer Services provides integrated computing solutions to more than 16,000 automotive and truck dealers throughout the United States, Canada and Europe. ADP Dealer Services Group is the third largest business unit of ADP. ADP, with more than $6 billion in revenues and more than 500,000 clients, is one of the largest independent computing services firms in the world.
As part of its overall public education program, CAPA has enhanced its website with new features that will enable anyone with Internet access to search the complete database of certified parts, obtain information about vehicle test fits, and use an automated complaint form.
Anyone who visits www.capacertified.org can easily run a "quick search" by vehicle, which will show a listing of all certified parts available for that particular vehicle. The complete database can also be queried by CAPA part number to instantly verify if the part is currently certified. In addition, users can easily obtain a list of all CAPA-certified parts, or can limit their search to a specific manufacturer, make or model.
"In short, our website enhancements ensure that key information about CAPA parts is instantly available to anyone," said Jack Gillis, Executive Director of CAPA.
The website also contains information on CAPA's Vehicle Test Fit Program. In order to become certified, each part must be validated by CAPA's independent, third-party testing facility (Entela Labs, Grand Rapids, MI) to determine that it will properly fit on a vehicle using very specific guidelines. CAPA's vehicle test fit program is added to an extensive battery of fit, finish, material and performance tests that are required for each part. Detailed information on CAPA's six different VTF's and a specific listing of the required tests are also available at the website.
"Providing complete access to information on which parts achieve our high levels of quality and program details have always been fundamental priorities for CAPA," said Gillis. "As an independent, third-party, standard-setting and certification organization, providing universal access to information is a key component in our credibility."
Currently, CAPA distributes over 50,000 copies of the Directory of High Quality Certified Parts each year and provides electronic estimators with complete part status updates each week. The website is updated daily, and makes current information instantly available. "Not to provide the public with complete access to the program would imply a sense of 'secrecy' and incompleteness that has never been a part of the CAPA philosophy," said Gillis.
The CAPA website also includes an automated, on-line complaint form which provides consumers, collision repairers, part distributors, insurance adjusters and others with an easily accessible system for instant, real-world input of concerns about CAPA part quality.
During the first quarter of 2001, property/casualty net premiums written showed the strongest growth since the tail end of the last hard market in the second quarter of 1987. This growth was fueled by robust price increases in both the reinsurance and primary commercial-lines markets, according to an A.M. Best Co. report.
Even personal-lines premiums began to show improved volume growth, as rate increases were implemented in the nonstandard market.
A.M. Best data shows that net premiums written rose 11 percent over the comparable quarter of 2000, while the combined ratio improved a modest 1.1 points from 107.2 in 2000 to 106.1 in 2001.
Nevertheless, earnings for the sector remained depressed, although the reinsurance sector began to report the good news associated with improved rates and reduced catastrophe losses. The good news is that insurers are likely to sustain rate increases into the first half of 2002.
Charlie Crockett, Sales Director of 3M's Automotive Aftermarket Division, has retired from the company he has served for 36 years. INSIGHT commends Charlie for his knowledgeable and caring service to the collision repair industry during his tenure at 3M. He will be missed. It is good to know, though, that Charlie, according to a letter sent to INSIGHT publisher Charlie Baker, will be "moving on to recreational events that I have dreamed about all of my life."
Enjoy each day, Charlie!
Greg Stohr, currently 3M's National Accounts Manager, has been named Crockett's replacement.
BASF Coatings AG, Münster, and DaimlerChrysler AG, Stuttgart, have signed a basic agreement for worldwide cooperation relating to automotive refinish coatings of the Glasurit and R-M brands. Based on this cooperation DaimlerChrysler will recommend the two BASF brands for refinishing all brands and models of the DaimlerChrysler group.
On signing national agreements with the DaimlerChrysler service regions BASF will supply the DaimlerChrysler-approved automotive refinish products to all countries where these vehicles are sold and provide comprehensive local service there. The agreement requires BASF to provide training and technical assistance to spray painters working in the DaimlerChrysler dealer organization. In addition, the company will offer a comprehensive service package comprising fast and reliably delivery, meaningful advice, full support, training seminars and general information.
With this new agreement, the long cooperation between BASF and what used to be Daimler-Benz AG in the automotive refinishing area is being continued and expanded. For the first time, the scope of this new agreement includes the commercial vehicle products of the R-M brand. The special car refinishing products of both brands which Daimler Chrysler had selected and the commercial transport products of the Glasurit brand had received technical approval quite some time ago.
"The worldwide approvals granted to our products by all major car manufacturers are a success factor in our automotive refinish business", explained Jean-Pierre Monteny, head of the automotive refinish business unit of BASF Coatings AG. "These approvals form the basis for supplying our paint materials to the dealer network bodyshops of these companies. This way the car makers make sure that the paint materials comply with their quality guidelines as well as national environmental and health & safety requirements. Such approvals are granted by the global automotive industry on the basis of good quality, good service, and global product availability. Another major factor of course is our competence in the automotive OEM coatings business."
General Motors has selected CSi Complete as vendor of choice for customer satisfaction indexing for the Goodwrench Auto Body Center (GABC) program. GABC will evolve into a national network of dealer auto body repair centers with the vision of providing quality service and industry-leading customer care to vehicle owners.
GM marketing specialist John Hargraves, who visited CSi Complete June 5, worked diligently with the CSi Complete team to produce a comprehensive program tailored to meet the unique needs of the GABC facilities.
"It was a positive experience visiting the CSi Complete call center and meeting the team there," Hargraves said. "We have worked effectively together to institute a program that is a key element in our overall plans. CSI is a tool that we will utilize to insure we are performing at an industry-leading level," he added.
"We appreciate the opportunity and trust GM has placed in us," said John Webb, vice president of marketing, CSi Complete. "The fit has been a good one, and that makes for a satisfying working relationship," he added.
CSi Complete provides CSI to collision repair and automotive insurance clients in North America. Its focus is on providing management and marketing tools that assist clients in improving customer satisfaction, internal management processes and external marketing efforts.
Airbag Testing Technology has issued a consumer alert about airbags in flooded vehicles in the wake of Tropical Storm Allison.
When Tropical Storm Allison hit south east Texas and Louisiana on the weekend of June 9th-10th, it left a trail of destruction in its wake. In addition to the 18 lives lost in Texas alone, some $4bn worth of property damage is estimated in the state. Tens of thousands of cars are reported to have been flooded. Flood damage can have many seen, and unseen consequences for a car, and the safety of its occupants. Automotive airbags and seat belt pretensioners are particularly vulnerable to flood damage.
"Airbags are not designed to withstand flooding" says Peter Byrne, President of Airbag Testing Technology. "Flooding or water damage may seriously impair the airbag's ability to perform as designed in the event of a crash. They must be removed, and disposed of safely," added Byrne. While an airbag can be tested to confirm flood exposure, there is no safe way to re-use, or repair, a flooded airbag.
The impact of flood damage on automotive airbags, and their ability to function properly, is becoming increasingly well known. In January 2001, the GAO (General Accounting Office) reported that NHTSA had identified several safety defects in motor vehicles that were related to the failure of the airbags to operate properly after being exposed to flood damage or the intrusion of other liquids. NHTSA's investigation resulted in recalls that affected over 725,000 vehicles.
Airbag Testing Technology Inc. (ATT), based in Lakewood NY, is a privately held company that has developed proprietary technology (patents pending) to scientifically test and re-certify recycled, automotive original equipment (OE) airbags. ATT's technology enables un-deployed, OE airbags to be tested non-destructively, ensuring they meet the manufacturer's original specifications and therefore are safe to install in collision repair vehicles. Re-certified airbag modules are known as RAM.
Akzo Nobel has announced the creation of a new business unit. The launch of the Powder Coatings business unit underlines the Company's commitment to meeting the specific needs of powder coatings users worldwide.
This follows Akzo Nobel's acquisition of Courtaulds in July 1998, and a subsequent period of integration and rationalization. Operating under a single business brand - Interpon® Powder Coatings – the company considers the new global business better positioned to serve the needs of its diverse range of customers across the world.
Akzo Nobel markets two global powder product brands - Interpon for the architectural, automotive, appliance and industrial finishing markets, and Resicoat® for the functional markets of electrical insulation, valves and pipe fittings and steel rebar.
Rudy van der Meer, Akzo Nobel's Board Member responsible for Coatings explained: "By launching Powder Coatings as a separate, focused worldwide business unit, we are underlining the importance of this fast growing coatings sector. Our market leadership and global spread will provide a solid platform for continuing growth. We are an ideal partner for any international customer who uses powder coatings and requires consistency in product and service across its international operations."
Bill McPherson, General Manager of the newly formed Powder Coatings business, further explains, "Powder Coatings are increasingly seen as the preferred choice of finishers operating in a world which is strongly focused on environmental issues. The environmental benefit, plus their well-reputed toughness and durability, will continue to drive further growth in powder usage as our industry takes on and solves the technology challenges presented by new areas of application.
"Patented color mixing technology has revolutionized service levels in small-batch, custom-matched powder orders. The rapid-response service based on this technology, 'Interpon Express', is being rolled out this year right across the world, following successful implementations in the UK, France, Germany, Sweden and China. Customers of Interpon Express can now buy any quantity, right down to a single box, of their special custom-matched color and have it delivered in a far quicker time than was ever possible with traditional powder process technology."
Akzo Nobel, together with joint venture partner Chang Cheng Securities, is set to become the first manufacturer of powder coatings in Vietnam. Akzo Nobel Chang Cheng will build a factory in Vietnam's capital Ho Chi Minh City to manufacture the full range of Akzo Nobel's Interpon® powder coatings. The company already operates three powder coatings facilities in China and Taiwan and is market leader in the region.
Akzo Nobel currently employs 68,800 people in more than 75 countries.
Travelers Insurance and Mitchell International have announced the successful completion of a pilot, with thirty Connecticut glass shops, and the beginning of a phased roll out of online processing of Travelers auto glass replacement claims via Mitchell's new web-based auto glass claims assignment and processing system. According to Travelers, the system will enhance claims processing speed and efficiency and reduce cycle times.
In using the new web-based application, independent glass shops will receive glass assignments for Travelers policyholders and process their claims through www.eGlassMate.net, Mitchell's secure website address. Mitchell says the site is another major step in Mitchell's e-business strategy and an important component of eMitchell.com, the company's open and interactive Internet workspace and marketplace for the insurance and collision repair industries.
The system, the first fully integrated, glass-only online claims processing site, will, Mitchell believes, significantly reduce the amount of time glass shops spend on administering glass claims. Its web-based design allows for immediate, real-time transfer of policy verification and eliminates the time-consuming faxing, phoning, mailing, and re-entering of data.
Travelers developed the policy verification component interface, and Mitchell developed the Internet application that allows for verification of coverage, job assignment, and invoice creation and submittal.
"Travelers continues to implement newer technologies with the objective of simplifying claims administration and enhancing customer satisfaction," said Mark Lucca, Director, Travelers claim field services. "This new online glass claims capability will greatly improve the entire process for independent glass shops. We are very pleased to work with Mitchell in this endeavor."
"Mitchell is pleased to work with an innovative and forward-thinking organization like Travelers to launch this web-based claims processing initiative," said Vivek Vasudeva, Mitchell's Director of Glass eBusiness. "We believe that online claims processing is the wave of the future for the insurance and auto glass industries. Glass providers will benefit even more when additional insurance companies are able to transact business directly and efficiently with replacement auto glass shops. This application will allow them to do so."
Additional innovations of the system include access to the latest benchmark parts information from National Auto Glass Specifications (NAGS), a division of Mitchell, and online news and updates.
Charlie Crockett, Sales Director of 3M's Automotive CCC Information Services Group Inc. has announced a set of strategic decisions aimed at ensuring a greater focus to better serve its customers in the U.S. automotive claims and collision repair industries. The realignment culminates the execution of CCC's strategic plan that includes:
- Consolidating management and delivery of all CCC products and services, including the company's DriveLogic e-commerce strategy, resulting in one organization with a single contact for sales, service and support.
- Realigning the executive management team to improve customer focus and product delivery.
- Creating a more efficient organizational structure resulting in a reduction in the U.S. workforce by approximately 130 employees at all levels of the organization.
- Significantly reducing the investment and operations in the CCC International division, and withdrawing from the U.K.- and U.S.-based claims outsourcing markets. CCC previously announced its intention to eliminate these outsourcing operations.
A key element of the realignment is the integration of DriveLogic with CCC's core business operations. CCC launched DriveLogic in early 2000 as part of the company's e-commerce strategy. Over the past year, DriveLogic has developed its open architecture that not only works with existing CCC solutions, including its signature Pathways® products, but also other third-party provider applications. Implementation of this architecture by CCC underscores its commitment to offering customers an open systems product portfolio. DriveLogic's automotive claims and collision repair applications is set for launch later this summer.
"Integrating DriveLogic with CCC makes smart business sense, and enables us to fully leverage existing investments in technology and resources," said Githesh Ramamurthy, Chairman and Chief Executive Officer, CCC Information Services Inc. "We are coming together to create one trusted source of solutions to our customers. No other information solutions provider can match this extensive offering," he added.
Also, as part of the integration, CCC announced certain changes in its executive management team. Mary Jo Prigge, currently President of CCC U.S. becomes President - Sales and Service and will be responsible for sales and service of CCC's entire product portfolio. Peter Largen, formerly President and Chief Operating Officer of DriveLogic, becomes Executive Vice President and Chief Marketing Officer of CCC U.S., responsible for product management and marketing. Jim Beattie, formerly Chief Technology Officer of DriveLogic, becomes Executive Vice President and Chief Technology Officer of CCC U.S. Prigge, Largen, and Beattie will all report to Ramamurthy.
"Just as we have aligned other parts of our business, we also have aligned our management team to meet our short- and long-term business goals and objectives. We will continue to rely on the experience and proven leadership of Mary Jo, Peter, Jim, and the entire management team, as we meet the challenges to deliver high-quality products and services to our customers," said Ramamurthy.
Additionally, CCC announced a workforce reduction of approximately 130 people, less than 10 percent of its total workforce.
"As we align our organization to our business strategy, it is essential that we put the right people with the right skills in the right positions to better serve our customers," added Ramamurthy. "While we deeply regret that some jobs will be eliminated as a result of these changes, these actions will benefit our stakeholders by making us stronger and more efficient. We will make certain that we provide support to help impacted employees take the next step in their careers."
The company’s concentration on U.S. market opportunities has resulted in a decision to reduce investments and operations in CCC International. "While we continue to believe in the strategic importance of Europe, we believe it is in the best interest of our stakeholders to focus aggressively on the growth opportunities in the U.S. market at this time," said Ramamurthy.
CCC expects the realignment to be complete during July. According to Reid Simpson, Executive Vice President and Chief Financial Officer, CCC plans to take a one-time, pre-tax charge of approximately $2.5 million in the second quarter to reflect costs associated with the reduction in workforce. Further, the company will record certain one-time, pre-tax costs totaling $2.7 million associated with reducing operations in CCC International.
During the first quarter of 2001, property/casualty net premiums written showed the strongest growth since the tail end of the last hard market in the second quarter of 1987. This growth was fueled by robust price increases in both the reinsurance and primary commercial-lines markets, according to an A.M. Best Co. report.
Even personal-lines premiums began to show improved volume growth, as rate increases were implemented in the nonstandard market.
A.M. Best data shows that net premiums written rose 11 percent over the comparable quarter of 2000, while the combined ratio improved a modest 1.1 points from 107.2 in 2000 to 106.1 in 2001.
Nevertheless, earnings for the sector remained depressed, although the reinsurance sector began to report the good news associated with improved rates and reduced catastrophe losses. The good news is that insurers are likely to sustain rate increases into the first half of 2002.
In order to address the growing need for the disposition of damaged vehicles in the Dallas-Fort Worth market a local investor group has formed a new company, North Texas Insurance Auto Auction (NTIA) to provide a one-stop solution for the DFW insurance and automobile auction market. William "Billy" Rosenthal of the Penrose Group, a director and one of the founding investors states, "After careful study of the DFW insurance and auto auction market, our research indicates that this market is growing very fast, and customers want top notch service at competitive prices. Our group consists of hand-picked individuals from within and outside the industry with one thing in common: they all built businesses founded on exemplary customer service."
NTIA was founded in the first quarter of 2001 following extensive meetings with vehicle buyers and sellers, to identify key service and facility points that differentiate NTIA from other service providers. That research in hand, NTIA will build a new facility in northwest Tarrant County incorporating this feedback. NTIA intends to offer those services to insurers, lenders, and dealers needing prompt disposal of vehicles in North Texas. NTIA's competitive strengths include a more convenient location, use of the latest Internet technologies, experienced management, and a strong capital base to support growth.
The insurance automobile auction business has been consolidating over the last decade, and as recently reported by the Wall Street Journal, the two public companies INSIGHT tracks, Coparts and Insurance Auto Auctions, now control about 50 percent of a national market estimated at two million vehicles annually. In Tarrant County, unlike Houston and other large population centers, there are no independently owned insurance auctions currently operating. Independent operators in other areas have been highly successful.
Kenneth Rickli, owner of Bayou City Auto Pool in Houston, says "The DFW market has desperately needed competition, and this operation will be well received, especially considering the talent pool of shareholders and directors with many years of industry experience. My personal knowledge of these folks' commitment to genuine customer service gives me great confidence in their venture."
Ron Sturgeon, NTIA's chairman and a founding investor, says, "We are thrilled to be Tarrant County's first independent provider of these services, and our desire to please both buyers and sellers will be systemic and evident in all our products and services."
Sturgeon was in the automotive recycling business for the last 20 years, recently selling his six Texas locations to a subsidiary of Ford Motor Company.
Feedback
Have a comment about this article? Send Email to Editor, INSIGHT's Editor
©2000 Collision Repair Industry INSIGHT
All Rights Reserved
FEATURED
LINKS:
