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Business Tools | This article originally appeared in the November 2002 Issue of INSIGHT ©2002 Collision Repair Industry INSIGHT All Rights Reserved NAPA Auto Parts Launches WebConnect CCC Names Jim Dickens Senior VP Product Marketing PPG Reports Coatings Unit Up in Q3 BASF Explores UV Technology at Symposium ADP Reports Record Q1 Earnings Ontario Consumers May Pay Additional Premium for Using OEM Parts Allstate Q3 Profits Up 24% Driven by Higher Premiums DriverShield and eAutoclaims Drop Merger Plans I-CAR Restructures Industry Training Alliance Fee Fitch Report Says Auto Insurance Underwriting Remains Unprofitable Sherwin-Williams Q3 Earnings Will Exceed Expectations
Roger Wright Named chairman of CIC for 2003
Genuine Parts Profits Up on Auto Parts Sales
Insurer Paid Collision Dollars Down in 2002
Surveys Show Many Plan to Work Past 65
INDUSTRY UPDATE
NAPA Auto Parts and OnStation Corporation have completed a six-month test period and are now rolling out the NAPA WebConnect CRM to NAPA's nationwide network of more than 11,000 NAPA Auto-Care Centers. NAPA WebConnect CRM is OnStation's suite of customer relationship-building tools designed to help automotive service providers increase customer satisfaction and promote repeat business through online services and targeted email communications. Using WebConnect CRM, visitors to NAPA AutoCare Center web sites, via NAPAonline.com, can schedule service appointments online and receive timely e-mail reminders for scheduled services. NAPA AutoCare Centers can create targeted promotions and email them directly to customers. Centers can then track customer satisfaction by using WebConnect CRM to send surveys to customers and receive feedback in real time. "NAPA WebConnect CRM from OnStation is a mutually beneficial solution that gives customers the level of service they demand and NAPA AutoCare Centers the tools they need to increase customer satisfaction and repeat business," said Steve Handschuh, President of NAPA. "With the nationwide rollout and our new parts procurement system NAPA ProLink, we're providing best in class services and systems for both our service partners and customers." "WebConnect CRM is one of the biggest breakthroughs we've ever seen in this business," said Jim Piraino, owner of Camarillo Car Care Center in Camarillo, CA. "WebConnect CRM has really helped smooth out the peaks and valleys in our service schedule. If things get slow, it takes five minutes to pull together a promotion and email it to all our customers. The customers love the idea that they can make their own service appointments online, after hours, without ever getting a busy signal. My repeat business has increased significantly since we signed up for the WebConnect CRM program." In other company news, the NAPA Institute for Automotive Technology (NIAT) OnSite Training Program conducted over 600 training sessions for more than 9,000 local repair shop staffers and independent automotive technicians in the past six months. Classroom and hands-on training in mechanical and other automotive services were part of the program, which is provided at convenient sites in participating markets during off-peak hours. NAPA AutoCare Centers receive two NIAT OnSite tickets free with their 2002 membership and are eligible for other training discounts. o CCC Information Services Inc. has announced the promotion of Jim Dickens to senior vice president of product management and marketing. As a member of the executive management group, Dickens will be responsible for product strategy and delivery for CCC, a leading supplier of information and technology solutions to the automotive claims and collision repair industries. "Jim will be instrumental in leading our product management organization in introducing new products and product upgrades to the market and in making sure that our products deliver the best possible value to our customers," said Githesh Ramamurthy, CCC's chairman and CEO. "He brings to this role a passion for our business, a deep understanding of our customers' needs and a record of achievement with our company." Dickens joins the product management organization from CCC's Automotive Services Group (ASG), where he served as Group Vice President since 1999. In that role, Dickens oversaw the sales and service operation, which included nearly 15,000 collision repair facility customers. Dickens was instrumental in leading ASG's sales of Pathways Estimating Solution, which achieved 10 percent revenue growth over the past five consecutive quarters. Active in the auto-claims industry, Dickens was recently named to the board of trustees for the I-CAR Education Foundation. He also is a member of CIECA, serving on a committee that helped establish the industry's Estimating Management Systems (EMS) standards. Before joining CCC, Dickens was a product engineer for DuPont's electronics division. Peter Gorka, an industry veteran and long-time CCC executive will take over as the new ASG Vice President. Gorka has served as the central zone vice president and was instrumental in the growth of that group. He joined CCC after holding several management positions for 15 years at Reynolds and Reynolds. There, he worked in service and support operations, product management and finance. "Pete's focus and leadership will help our Automotive Services Group achieve even greater customer satisfaction, deliver the best possible customer service and drive future growth," said Mary Jo Prigge, President of CCC's Sales and Service. Thomas Baird has been appointed to the new position of senior vice president of corporate and business development. Baird will identify and secure strategic alliances and growth opportunities for CCC. Baird was previously vice president of new ventures and of corporate strategy and development for Reynolds and Reynolds, responsible for investing in and developing new growth businesses as well as overall company strategy and mergers and acquisitions. Previously, he held corporate, business development and engineering positions at TRW Inc. "Tom brings extensive corporate development experience to CCC," said Ramamurthy. "His leadership in this area will help CCC capitalize on opportunities that enable us to continue to deliver top-quality products to our customers."
PPG Industries has reported third quarter net income of $148 million, or 87 cents a share, including aftertax income of $15 million, or 9 cents a share, to reflect the decline in value of PPG stock included in a previously reported asbestos settlement agreement. Excluding this income, net income was $133 million, or 78 cents a share. Sales were $2.07 billion. This compares with third-quarter 2001 net income of $93 million, or 55 cents a share, on sales of $2 billion. For the first nine months of 2002, PPG recorded a net loss of $163 million, or 96 cents a share, including one-time aftertax charges. Excluding these items, net income was $378 million, or $2.23 a share. Sales were $6.08 billion. This compares with nine-month 2001 net income of $304 million, or $1.80 a share, including a $71 million aftertax restructuring charge. Sales were $6.26 billion. "Although we are seeing some improvements, the global economy remains uncertain," said Raymond W. LeBoeuf, chairman and chief executive officer. "However, the strategic steps we have taken in recent years to improve our business mix have enabled us to increase earnings and the consistency of those earnings... Amid the present economic uncertainty, which may continue into next year, I believe our actions over the past few years will enable PPG to continue its 30-year trend of generating higher and higher earnings per share with each business cycle." Coatings sales increased six percent as volumes increased for every business except aerospace. The coatings segment generated record third-quarter earnings, up 45 percent from a year ago, on the strength of volume gains, lower raw material costs and the benefit of goodwill no longer being amortized. This was offset in part by higher pension and retiree medical costs and higher selling costs for the architectural business. Glass sales and earnings were down on lower volumes and prices and higher pension and retiree medical costs, despite higher volumes in automotive OEM, overhead reductions in every business and greater manufacturing efficiencies. To satisfy customer curiosity in how the highly efficient UV (ultraviolet)-cure coatings technology could potentially be used in the collision repair industry, BASF Corporation's Automotive Refinish business recently hosted a UV-cure coatings symposium at the company's automotive campus in Southfield, Mich. The purpose of the symposium was to review and demonstrate BASF's expertise in UV-cure coatings, and exchange ideas for new commercial applications for the refinish market. Joining members of BASF's marketing and research and development groups were representatives from major automobile manufacturers (OEMs) and national collision-repair industry associations. "BASF has proven expertise in UV-cure technology," said John Gilbert, Technical Manager, Coatings, BASF Corporation. "We see a lot of potential to transfer our tangible results in the automotive assembly plant to the refinish area. In the future, we will see UV-cure coatings more widely used in a host of markets and applications." Ken Perry, Technical Director, BASF Automotive Refinish, added, "This technology can reduce cure times dramatically. Going from hours to minutes or even seconds to achieve a full cure can significantly improve the way a collision repair shop operates." According to Joe Skurka, Manager, OEM Relations, BASF Automotive Refinish, it was important to include both the OEMs and repair industry associations, with whom BASF works closely to develop products and programs for the refinish market. "Repair paint products must be able to withstand the same punishment that the OEM coatings endure," he explained. "Meeting the productivity, application and cost effectiveness targets required by repair shops is a crucial aspect of any product we develop. We think this technology can help our customers be more successful." Gilbert agreed, saying, "UV-cure coatings have the potential to improve productivity in the body shop as well as at the assembly plant. BASF has been a leader in developing and applying the technology in a real-world environment, and our experience enables us to develop a UV-cure system that can significantly enhance a shop's cycle time and profitability." Skurka added that the UV-cure coatings symposium exemplifies BASF's willingness to break new ground in technology and to consult early with industry representatives and customers that eventually will utilize new systems. "The symposium elicited great interest and lively discussions, an exchange of questions and suggestions for further development, and technical matters for us to investigate further," he said. "The consensus of all participants was that UV cure is an exciting development in coatings technology." BASF's DynaSeal UV hybrid sealer is an example of how UV-cure coatings can be successfully implemented in commercial end products. This system is a dual-cure (UV and thermal) sealer for coating sheet molded composite (SMC), which is extensively used in the automotive industry. Sealing the molded SMC surface prevents porosity defects in the finished surface. This is achieved by curing the sealer with a UV light followed by a thermal cure. Using this new technology allows the SMC surface to be sealed before the part experiences any heat in the painting process. "We expect that the entire automotive industry, from the OEMs to dealer shops to independent collision repair businesses, could benefit from the efficiency, effectiveness and reduced emissions offered by this new technology," added Perry. Automatic Data Processing, Inc. achieved record revenues and earnings per share in its first quarter of fiscal 2003. This represents ADP's 165th consecutive quarter of record highs in both revenues and earnings per share since becoming a public company in 1961. Revenues approximated $1.6 billion in the quarter ended September 30, 2002, up two percent over last year. Pretax earnings increased six percent and net earnings increased seven percent. Diluted earnings per share, on fewer shares outstanding, increased ten percent to $.34 from $.31 last year. Commenting on the quarter, Arthur F. Weinbach, chairman and chief executive officer, said, "Revenue growth was in line with our expectations for the first quarter. Employer Ser-vices, Dealer Services and Claims Services grew four percent, eight percent and three percent, respectively. Brokerage Services' revenue declined two percent. In Employer Services new business sales grew four percent, client retention improved slightly, and the number of employees on our clients' payrolls declined two percent in the quarter, a slightly lower decline than the full fiscal 2002 average... Overall we see no indication of external economic improvement, although our business unit results, while mixed, are slightly ahead of our plans."
As part of the efforts of the Ontario government to reform auto insurance, the Auto Insurance Review Committee has sent out a list of proposed changes to the Insurance Act and other laws, including a new proposal that customers must pay for additional coverage if they want their collision-damaged vehicles to be repaired back to original condition through use of OEM parts. The Review Committee received a report from the Collision Industry Action Group (CIAG) profiling the problems repair facilities are experiencing with "aftermarket" collision repair parts and urging the government to ensure these parts are safe (by meeting OEM standards incorporated in federal legislation) and fit properly. Instead, the Review Committee is proposing: "For consumers who have a preference for original parts, require insurers to offer optional coverage where only original equipment parts may be used in collision repairs." The Committee is proposing that an additional insurance premium cost be charged to motorists who want their car or truck repaired to original pre-accident condition using the body parts that were made by the original manufacturer of the car. "Shop and consumer complaints are epidemic, and lawsuits are still outstanding from consumers who found that the aftermarket parts installed, often without their knowledge, failed to fit, perform or had acceptable finish, compared to the original equipment parts. To now charge these consumers additional premiums to repair their car back to the way it was before the accident using the car manufacturers’ own parts is a slap in the face to motorists who value their vehicle and will add fuel to claims of diminished value of their car," said John Norris of CIAG. One recent study showed in a comparison test that the a car repaired with aftermarket parts was valued at a significantly reduced price by used car experts compared to a car repaired with original equipment parts. In the U.S. State Farm Insurance was hit by the courts with a $1.18 billion fine for knowingly having installed on their insured's cars, aftermarket or non-original equipment parts that they knew were not the same fit and function as the OEM parts. A number of similar lawsuits have been filed in Canada. Ontario consumer law does not require that motorists be told or be given any documentation to advise them where the collision repair parts put on their car originated, and foreign parts are not required to meet any safety standard for use in Canada. o
Allstate Corp. has raised its estimate for full-year earnings after reporting a 24 percent increase in third quarter net profits, built on higher homeowner and auto insurance rates. Net earnings were $280 million, or 39 cents a share, up from $226 million, or 32 cents a share, from the previous year's third quarter. Revenues were $7.24 billion, up slightly from $7.17 billion. Operating income was $548 million, or 77 cents a share, up from $401 million, or 56 cents, in the third quarter of 2001. Allstate, the nation's second largest personal lines insurer behind State Farm, attributed its reported good financial report to its latest rate hikes, which went into effect in the third quarter.
DriverShield Corp. and eAutoclaims.com, Inc. have terminated their Letter of Intent and discussions to merge eAutoclaims into a wholly owned subsidiary of DriverShield. Barry Siegel, Chief Executive Officer of DriverShield and Eric Seidel, Chief Executive Officer of eAutoclaims in a jointly-issued statement said, "After conducting due diligence for the past several weeks, we have decided that it would be best for each company to pursue its own separate strategy." I-CAR has restructured its Industry Training Alliance fee for the benefit of students that apply for Gold Class points for training completed through Alliance partners. The fee restructuring will also make the Gold Class Professionals qualification more affordable, reaffirming I-CAR’s commitment to increasing and optimizing collision repair training within the entire industry through the Industry Training Alliance. When applying to I-CAR for recognition of Alliance provider training, the new fee structure in the United States is $20 per Gold Class point, with a maximum total fee of $100 per application. In Canada, the new fee structure is CDN $30 per Gold Class point, with a maximum total fee of CDN $150 per application. Formerly, there was no maximum fee cap per application. A student can also save money by applying for I-CAR recognition of multiple Alliance training programs on a single Alliance student application; the same processing fee structure applies. Each student must submit a separate application. For I-CAR recognition of courses from career and technical schools and colleges participating in the Alliance, a different fee structure applies. The new Industry Training Alliance fee helps encourage comprehensive, quality collision repair training through the resources of Industry Training Alliance members. The Training Alliance eliminates training redundancy and reduces the time and expense of technical training. It also enables training organizations and career and technical schools and colleges to work together to provide the collision industry with a coordinated and comprehensive training curriculum. By further encouraging training through the Training Alliance, I-CAR's vision statement of "Every person in the collision industry has the necessary technical knowledge and skills relevant to their position to ensure a complete and safe repair" becomes closer to realization. Auto insurance financial results will improve in 2002 and 2003, but these gains will be insufficient to return the industry to underwriting profitability, according to a report by Fitch Ratings. Based on the market's very poor underwriting results in 2001, Fitch reported that it does not believe the estimated increase in auto insurance premiums will be sufficient to return the industry to underwriting profitability. "It is questionable whether the broader auto insurance market will reach a position of strong underwriting profitability in the next few years due largely to the business's highly competitive nature and uncertainty due to inherent regulatory and legal factors," said Don Thorpe, Director, Fitch Ratings. "The market has improved to a degree that organizations with an appropriate geographic mix, and strong risk selection and pricing expertise can report good underwriting results in the current environment." The new report charts a severe decline in profitability that began in 2000 and continued into 2001. The industry was hurt when previously favorable trends in loss severity reversed at the same time that major participants were defending their shrinking market share through aggressive price competition. Based on this performance, insurers have shifted their focus from maintaining market share to improving profitability and have increased premium rates notably in each of the last two years. However, these price increases at least partially, have been offset by increased loss severity and declining investment income. "For companies weighted more towards the auto insurance line, factors that are likely to influence ratings going forward are underwriting results that are significantly better or worse than peers, and an ability to maintain or improve capital adequacy levels to keep up with revenue growth," said Thorpe. As auto insurance is a relatively short-tailed segment, investment returns on loss reserves are not as significant a factor in determining profitability for auto writers compared with other longer-tailed lines. Still recent declines in interest rates increase the imperative for companies to write a significant underwriting profit in order to earn an adequate return on capital in auto insurance. The Sherwin-Williams Company is updating its expectations for the third quarter and year 2002 which were last announced on July 18, 2002. Consolidated net sales for the third quarter are expected to increase approximately 4.0 to 4.3 percent versus the same quarter last year due to increased sales volume. On July 18, 2002, the consolidated net sales increase for the quarter was anticipated to be in the low single digits over the third quarter of 2001. Diluted net income per common share for the third quarter of 2002 is expected to be in the range of $.70 to $.73 per share due to anticipated gross margin improvement, up from $.65 to $.70 per share. Annual sales increases for 2002 are expected to be in the low single digits over 2001. With annual sales at that level, diluted net income per common share for 2002, before cumulative effect of change in accounting principle, is anticipated to be within the range of $2.00 to $2.06 per share. On July 18, 2002, annual sales were anticipated to be slightly higher than 2001 and diluted net income per common share for 2002, before cumulative effect of change in accounting principle, was anticipated to be within the range of $1.92 to $2.03. Net income was $90,322,000 and diluted net income per common share was $.58 per share in the third quarter of 2001. Net income for the year 2001 was $263,160,000 and diluted net income per common share was $1.68 per share. Adding back goodwill amortization to 2001 net income to be comparable with the new accounting standard effective in 2002, net income would have been $96,299,000 and $287,250,000 for the third quarter and year, respectively. The company purchased 1,950,000 shares of its common stock during the third quarter of 2002 bringing the total purchased to 5,192,200 shares for the first nine months as we continue to believe the stock is a good value. The company has remaining authorization to purchase 11,807,800 shares. At the Collision Industry Conference (CIC) in Seattle during October, Roger Wright was named chairman of CIC for 2003. Wright spent 25 years of his career working for insurance companies before joining Collision Team of America in 1998, then becoming vice president of insurance relations for the CARSTAR chain in 2000. He is also chairman of I-CAR's board of directors. Wright takes the reins from outgoing chairman Lou DiLisio, who deserves the thanks of CIC participants for his gracious yet determined encouragement of committees, focusing them on tasks at hand, and accomplished in a timely manner. The CIC Estimating Com-mittee recently sought input on the question: When should glass be removed for paint procedures? "If the glass or any of its attached parts, such as reveal moldings, will prevent refinishing to a clear cut-off point, it should be removed," a response from one paint company stated. "This recommendation is based solely on agreed upon principles of quality and long-term durability. Based on a vehicle's condition, age or design, it may be possible to accomplish a 'commercially acceptable' level of quality and long-term durability by utilizing common masking techniques such as roping or lifting. Issues related to diminished values will be prevalent if these techniques are used." State Farm's response to the committee was a bit more vague, saying the decision needs to be made on a "case by case basis." "State Farm feels that anytime a part obstructs a necessary refinishing process (i.e., may cause material bridging, will not allow proper preparation and/or will not allow proper access to apply materials), the part should be considered for removal," Rick Tuuri, co-chairman of the CIC Estimating Committee said, reading a written response from the insurer at CIC in Seattle in mid-October. So who is responsible for the costs if a glass is masked off and a paint failure occurs? "The issue of who should pay when a failure occurs because of the choice to mask versus remove must fall to the repair procedure decision maker," a written response from Sherwin Williams said. "The shop that decides to mask versus remove is as liable for the redo as the insurance company who refuses to pay for the procedure. The decision to mask versus remove must be equally agreed upon by both the shop and the insurance company." State Farm lays the burden for the cost of such a paint failure at the feet of the shop, "assuming proper consideration was given the answer as to when a glass should or should not be removed." Committee co-chairman March Taylor commended State Farm, however, for being "very realistic and open to negotiation" in their response as to who should bear the cost when a glass or related molding is broken or damaged during the removal process. "State Farm feels a discussion should take place between the repairer and the estimator as to whether the glass should be removed and who should be held responsible should damage occur," the insurer stated. "Clearly, negligence on the part of the repairer during removal process would be the responsibility of the repairer. On a case by case basis, the repairer and estimator should reach a prearranged financial agreement as to how costs will be handled should damage occur." Some of the options that could be agreed upon based upon that discussion, State Farm said, would be that any such costs be divided equally between the shop and insurer, or that the insurer buy the replacement glass at cost, without mark-up to the shop. In other news and discussions
Genuine Parts Co., the distributor of automotive and industrial replacement parts under the NAPA brand, reported that its quarterly earnings rose as solid auto parts sales offset weakness in industrial products. Third-quarter net income increased to $94 million, or 54 cents a share, from $88.2 million, or 51 cents, the year before. Larry Prince, Chairman of the Board of Directors, announced that sales totaling $2.2 billion were up three percent as compared to the third quarter of 2001. Net income was $94 million, an increase of seven percent from $88.2 million for the third quarter of 2001. During the nine months ended September 30, 2002, sales totaled $6.3 billion, which were flat with the same period in 2001. Mr. Prince commented, "We were encouraged by the results in each of our business segments with all showing continued progress. Automotive sales were up three percent for the quarter and were led by a four percent gain in our NAPA U.S. Automotive Parts Group. We expect this picture of gradual improvement to continue in the fourth quarter with gains in the three to four percent range for our Automotive Group." Atlanta-based Genuine Parts said sales rose three percent to $2.2 billion. INSIGHT has heard good reports from attendees at the International Bodyshop Industry Symposium, held in Switzerland in September. Chris Mann, of Bodyshop Magazine in the UK, has once again pulled a great event together. Many speakers from around the world shared their views on national and international industry issues: where we are and where we may be headed. Here are some quotable quotes from a few of them: Chris Mann, Bodyshop, UK:So what of the UK body repair industry today? Bodyshop numbers are continuing to decline sharply. Many, if not most, bodyshops are extremely busy, but few are making more than nominal profit, and one-third are losing money - even though UK productivity levels are possibly the highest in the world. There is a dire shortage of skilled labour [in the UK] and a desperate requirement for the development of a new generation of crafts people with the skills and knowledge to be able to return to a repair culture. This will not be achieved until labour rates are revised upwards so that bodyshops can once again sell their core product at a fair profit rather than as a loss leader offset by parts and paint margins. Sheila Loftus, Hammer & Dolly, USA:Despite the formation of national and local associations, the collision repair industry in the United States has rarely spoken with a unified voice on any issue. Direct repair programs, for example, continue to divide the collision repair industry - sometimes bitterly... Some collision repairers, most consolidators, and OE dealer groups have decided that insurers, rather than consumers, are their true customers and have tailored their business approach to fit insurance company needs. There is no comprehensive national strategy to address the labor shortage in the collision repair industry. State and local associations, and sometimes individual shop owners, have designed their own plans, but the shortages persist. Stealing of employees continues, and this kind of activity will no doubt increase as Allstate becomes a larger player in the industry. To survive in an increasingly difficult business climate, collision repairers, as usual, will have to rely on their adaptability... The day-to-day pressures collision repairers face in the United States - and, indeed, around the world - are incredible and unfortunately, there doesn’t appear to be any calm waters ahead on this very turbulent sea. Guy Bargnes, BASF Director of Marketing, NAFTA Region, Automotive Refinish:Why all this interest in E-Business? Well, first the suppliers are feeling the pressure of demands from bodyshops for lower prices and higher investments. They consider that by using a more efficient supply chain utilizing various E-Business initiatives, they can use the resulting savings to respond to the bodyshops’ requests; at the same time improving their own margins. Second, suppliers think they can gain an edge over their competitors by using E-Business. An effective vendor-managed inventory system... could gain significant competitive advantage through accurate forecasting and inventory control. Suppliers also believe that the information generated or captured through the new E-Business solution will allow them to give a better service to the bodyshop. Bodyshops realize the opportunity for improved communication with insurance companies. And, the insurance community likes the comparative data. It gives them the opportunity to track Key Performance Indicators (Kips) so they can better judge who should be in a program and who should not. Finally, there is the opportunity for all these dissimilar systems to talk to each other in a seamless fashion. That’s known as systems integration. According to recently released national statistics from the National Association of Independent Insurers (NAII) total dollars of collision repair paid claims were down 9.3 percent in the first quarter of 2002 from first quarter of 2001, the largest decrease by far since NAII began monitoring U.S. insurer numbers in 1997. Overall paid collision losses in the first quarter were $3.7 billion, an amount actually second in size only to the first quarter of 2001’s banner figure of $3.9 billion. The largest decrease until this year was in first quarter 1998, when a negative 6.3 percent was posted. Second quarter paid losses are off 2.2 percent from the same quarter in 2001, and paid claim frequency is holding steady at about 6.6. INSIGHT predicts that total collision repair paid claims for the entire year 2002 will be down overall by about six percent. A large majority of workers over 45 plan to stay on the job into their retirement years, with 80 percent saying most people can't afford to quit work altogether, according to a new survey by the AARP. The survey found that 69 percent of workers say they will keep working in retirement. About three-quarters of those surveyed say money is one of the major reasons they plan to continue working. But about the same number said they enjoy working and 84 percent said they would continue to hold jobs even if they are financially set for life. Many of the figures gathered in the survey are similar to those AARP has seen in earlier studies. But in one notable difference, 56 percent of those surveyed say they need to work to pay for health care costs for themselves and their families, up 15 percent from a survey done in 1985. The survey, conducted in May and June, is based on a national sample of 1,500 people between the ages of 45 and 74. The survey, AARP officials say, points to the need for employers to offer older workers the chance start mentoring programs, to work flexible schedules, to share jobs with others, or to shift to part-time. Some do so while allowing workers to keep their health care coverage and other benefits. In another survey by CIGNA Retirement & Investment Services, 80 percent of Americans plan to take a more active role in managing their retirement investment portfolios. According to the survey, 80 percent of employees said they intend to be more involved in managing the investments in their workplace-provided retirement programs. Fifty-eight percent plan to change their investment strategies if their retirement portfolio balance is lower at the end of 2002 than it was at the beginning of the year - an increase of more than 10 percent from responses to a similar survey question a year ago. A large majority of workers want their employers to provide more investment education, communication, guidance and financial-planning tools to help them better manage their workplace portfolios. "Employees clearly want to play a more active role, and they want their employers to offer the information and resources to help them steer a more informed course in managing their retirement portfolios," said John Y. Kim, president, CIGNA Retirement & Investment Services. The second annual Workplace Report on Retirement Planning - entitled "The Workplace Investor: Taking Control" - sampled opinions from 750 employees and 200 employers nationwide. Among the 58 percent who foresee a change in their investment strategies:
The survey also found that employees are more likely to remain engaged in the market rather than flee because of present volatility. Overall, the survey found that workers are decidedly upbeat about the future of the market. Of those contacted, 67% of employees admit they have room for improvement in planning for their retirement, giving themselves a "B" grade or lower. At the same time, 66% say they will do a better job of diversifying their assets across a range of investment options. On the whole, employees expressed interest in becoming more informed about the investment options available to them. To that end, they state clearly that they want their employers to make available a wider range of financial-planning solutions. (Editor’s note: See Part 2 in next month’s INSIGHT for Retirement Investment Tips for Employers and Employees.) FeedbackHave a comment about this article? Send Email to Editor, INSIGHT's Editor ©2002 Collision Repair Industry INSIGHT | FEATURED
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