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Letter to the Editor

Rekeying Redux

Shops have been complaining about the time and expense of re-entering insurer estimate data for years. Is an end in sight?

The good news: One of the estimating system providers has announced that the next release of its system will enable shops to electronically receive insurer-written estimates, eliminating the need to rekey that data from a printed estimate into the shop's computer system.

"Shops won't have to recreate that estimate when a consumer walks in with an estimate originally prepared by an insurer," the company spokes-person said.

The bad news: That announcement came back in September of 1999. Nearly five years later - and well over a decade since Collision Industry Conference (CIC) participants created an organization to create electronic system standards to address this very issue - shops are still forced to rekey more than 2 million estimates a year, according to one study.

"Insurance companies seem to be able to [electronically] receive estimates written by body shops pretty well, so why can't body shops [electronically] get estimates written by insurance companies?" Massachusetts shop owner Chuck Sulkala asked at CIC in Alexandria, Va., last month, just as he had at CIC in Minneapolis in September of 1999, and at several meetings in the two years prior to that. "Somebody is delaying this process, and I know it's not the repairers."

The extent of the problem

In yet another attempt to try to convince those who may be delaying the process that redundant data-entry is costing everyone some serious money, CIC's Information Technology Committee conducted a survey of collision repairers at CIC earlier this year. While the data was insufficient to be truly scientific - it is based on responses from just 44 shops - the findings were interesting to say the least.

Cindy Schnier, co-chair of the committee, said the study found that on average, shops have to rekey data from printed insurer estimates into their own estimating systems for about 28 percent of their jobs. Schnier said that equates to about 2.52 million of the approximately 9 million auto insurance claims annually.

The shops who responded to the survey said this rekeying process takes an average of about 21 minutes if the estimate was written on an estimating system the shop has, and about 33 minutes if it was written in a different estimating system. Schnier said the committee used the lower of these two time estimates, and assumed a wage of $20 per hour for the shop employees rekeying the estimate.

"Given these assumptions, that basically says there are 2.52 million estimates that are rekeyed each year by body shops, costing a minimum of $17.64 million," Schnier said. "That costs everybody money."

So what's the hold-up?

After reporting its findings at CIC last month, the committee held a panel discussion to determine what the barrier might be to shops receiving insurer estimates electronically. The panel, which included representatives of the three major estimating system providers - ADP, CCC Information Services, and Mitchell International - focused on whether an insurer could send estimate data electronically to a shop if both were using the same estimating system.

Chad Taylor, senior director of product management for Mitchell, said his company currently has such a process in place with insurers in Canada and with Progressive Insurance in the United States; it enables shops, for example, to download Progressive estimates directly into their Mitchell estimating system.

"The idea could be extended to other insurance companies," Taylor said. "It's not something we can extend without an insurance company's permission. But it's doable. Everybody views estimate rekeying as inserting an unnecessary cost into the overall system."

Representatives of CCC and ADP also said that from a technology standpoint, they too have or will soon have the capability to enable shops to receive insurer estimates. But all three companies said there are security and privacy issues that need to be addressed, and concerns about shops and insurers using different versions of the estimating software.

"There's a big difference between this and an insurer handing or faxing you an estimate and allowing you to look at it," Bruce Yungkans, CCC's technical product manager for collision estimating, said. "[In the current system] you still have to rewrite that estimate on your own system to make changes, and the insurer still has the original. You're talking here about transferring the information over onto your computer and having the ability to edit or change that estimate. Technically, we have the ability to transfer that file information today. However, we do not have the ability to control the data that's on those files."

But Sulkala and several other shop representatives at CIC blasted the estimating information providers for not making this a higher priority given that it is something shops have been requesting for more than a decade and was the impetus for CIC creating the standards-setting Collision Industry Electronic Commerce Association (CIECA) in the early 1990s.

"Where were security concerns years ago when someone wrote a handwritten estimate and gave it to someone else?" Sulkala asked. "If they can transfer [estimate] information in Canada, what the hell is the matter with the U.S.? I just don't buy this. Somebody, somewhere is delaying this process, and it's costing me and every other repairer money."

The insurer view

For its part, CIECA has said the transfer of insurer estimate data to a shop isn't being held back because of a lack of electronic standards for the data or other technological reasons.

"The technical problem with transferring an estimate from one system to another has been eliminated," Fred Iantorno, executive director of CIECA, said. "The data formats exist. Which now brings up the business aspects of it. People still need to give permission to access that data."

Those "people" that Iantorno refers to are clearly insurers. It's difficult to get insurance company representatives to speak about the issue on the record. A survey back in 1999 found that at least four major insurers had no plans to allow shops not participating in their direct repair programs to communicate electronically with the insurers. But in that same year, John Kent, who retired as senior auto claims consultant for State Farm earlier this year, voiced support for the idea.

"We have no problem with dropping the estimate down to the repairer if it can be done," Kent said. "I think it's a hell of an idea if we can get it done. Even now when we write an estimate in our drive-in and the customer ends up in what we call 'Select Service,' I have to fax the shop an estimate so they can enter it in their system. I don't want to do that. Let's get a solution."

At CIC last month, Michael Lloyd of California Casualty said he believes that many second-tier insurers are not even aware of the extent or expense of the rekeying issue. Compliance with the newer privacy laws that have been enacted is a concern, he said.

"But some insurers desk-audit estimates, and they have to rekey them, so it would be advantageous to those insurers to be able to use the data this same way," he said.

The panel of estimating system providers at CIC was asked outright if insurers are the ones delaying this process. CCC's Yungkans, whose company was the one back in 1999 that said its early 2000 software release would make the data transfer possible, responded.

"We're truly looking at trying to implement something that works, that doesn't necessarily invalidate the integrity of the data that's being transmitted from one place to another," he said. "We're working in that direction; we're not looking for anyone's permission to do that."

Whether the issue will gain more traction than it did throughout the 1990s remains to be seen. But it will at least remain on the table at CIC this year.

Schnier said her CIC committee is planning a similar discussion for the November 2 CIC in Las Vegas, but will focus that session on the issue of whether and how shops could receive insurer estimate data electronically even if the shop uses a different estimating system than the insurer.   o

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