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
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

CSI Debate

USAA’s move to require a particular CSI vendor renews a call for standards and raises concerns about shop data transfer.

Insurer-required use of a particular vendor has been a long-standing battle in the industry. Indeed, the standards-setting organization CIECA (Collision Industry Electronic Commerce Association) was formed back in 1992, driven in large part by a desire to eliminate at least the technical need for an insurer to require shops to use a particular estimating system in order to pass data back and forth electronically with that insurer.

So USAA’s memo to the shops in its STARS direct repair program last month that it was requiring the use of a specific vendor (Autochex) for customer satisfaction indexing (CSI) has touched off yet another wave of anger, frustration, and activity among those affected.

“The mandate to utilize specific service vendors in any aspect of the repair process is part of the business of collision repair, and SCRS contends that the decision should be left solely to each individual business,” Aaron Schulenburg, executive director of the Society of Collision Repair Specialists (SCRS), said. “In our opinion, impositions to use certain vendors or products extend beyond the bounds of professional courtesy and should be left to the discretion and choice of the business performing the repairs.”

By one estimate, the USAA mandate is requiring more than half of STARS shops to switch CSI vendors. And individual shop owners have expressed dissatisfaction not only about the need to switch, but also about the process used to acquire shop data for the CSI program.

USAA did not respond to requests for comment for this story. Autochex referred questions to its parent company, Mitchell International, which said contractual agreements prevent the company from commenting on any of Mitchell’s agreements with USAA or any Autochex customer. But the ripple effect of the decision raises issues that extend far beyond those three companies and even beyond the STARS shops affected by the decision.

In the interest of full disclosure, it should be noted that INSIGHT is a CSI provider in the industry. But we had not been among the three CSI providers previously approved by USAA for use by its STARS shops, so the decision is unlikely to affect our business. In the interest of fairness, we have included here the comments of other CSI providers. That aside, our goal with this story is not to focus so much on the specific actions of certain companies, but on the larger issues those actions raise for the industry.

Stay out of the kitchen

Even if some of the participants at the Collision Industry Conference (CIC) planning meeting in January were not yet aware of the USAA decision, it was clear during the portion of the meeting in which participants share issues they would like to see CIC address that insurer-mandated vendor selection was among those issues.

Rollie Benjamin, CEO of the Minnesota-based ABRA Auto Body & Glass chain, suggested that CIC identify ways that insurers “usurp the authority of the collision repairer” and interfere with the repairer’s business rather than just focus on performance.

“We have the responsibility to get results,” Benjamin said. “We need the authority to get those results. We need to know what results the insurance company is looking for, and then be able to make our best judgments on which vendors will help us get those results.”

Dan Charlebois of B&J Body Shop in Rancho Cordova, Calif., echoed Benjamin’s viewpoint, saying if shops “are going to cook the dinner, they should be able to buy the groceries” where they want.

USAA has couched its new requirement in very different terms. Its memo to STARS shops said the move to a single CSI vendor is part of its “constant efforts to improve services and processes” and helps “ensure consistency in the reported data.”

“By contracting with Autochex to be the exclusive vendor, USAA was able to negotiate very favorable pricing," Peter Raubenheimer, executive director of USAA’s auto physical damage claims service, wrote in the memo. “We expect that most, if not all, repairers will benefit with a price reduction when compared to their current CSI pricing.”

CSI standards

The decision is seen by some as a departure from USAA’s track record.

“Historically, USAA has ranked very high in shop surveys,” said Doug Kelly, president of CynCast, which provides CSI services. “It has been my experience that USAA values its relationships with the collision repair shops, which is why the decision to move to a single vendor was a surprise to most shops.”

John Webb, senior vice president of marketing and new business development for CSi Complete, acknowledged that shops and insurers have similar but different CSI needs. Insurers need to accurately measure and compare data across a DRP network, he said. Shops want to ensure that they satisfy customers and improve operations. But Webb noted the one positive that may come from the USAA decision is that it will push the industry to develop CSI standards that allow both shops and insurers to each "receive what they need in terms of CSI data yet leave some choice of vendors to the repair facilities."

Kelly agrees, saying a CIECA committee on CSI standards established in 2002 "did not receive enough support from the industry to make it a priority," but that he is hopeful the issue will now be addressed.

One hopeful sign for the standards effort is that CynCast, CSI Complete, and two other CSI providers (Customer Research and Performance Feedback) have announced an agreement to work together "to provide a comparative third-party CSI report" that a shop can use if requested for its CSI information.

"In the event a third-party requires the use of a single CSI provider that is one of the participating companies...there is further agreement to coordinate the survey effort to eliminate duplicate phone calls to the vehicle owners and ensure consistency in reporting for each others' CSI repair center customers," the CSI companies’ statement reads.

The companies said they “welcome other CSI providers to join in this effort.”

Data and privacy concerns

But a number of USAA STARS shops have said the USAA decision has raised their concern, not just because they have had to switch CSI vendors, but also because of how Autochex obtains the shop’s customer data for CSI calls.

STARS shops are being asked to use the “Mitchell Communications Manager,” software that automatically uploads data from the shop’s estimating system to Mitchell International. This “data pump” pulls customer information and other data – the “EMS file” – from every estimate that is committed – whether for USAA or any other insurer.

“We will attempt to survey only those customers whom you contracted with Autochex to survey (in this case, your USAA customers),” the Autochex memo to STARS shops reads.

“I’ve got a feeling State Farm and Allstate and other insurance companies wouldn’t be too happy knowing this is going on,” one Midwest collision repairer’s IT manager said.

Jason Bertellotti, Mitchell’s vice president of repair solutions, confirmed that data on all committed estimates from STARS shops is being uploaded, but said that “once received, only the files needed to complete Autochex surveys on behalf of the specifically contracted carrier or on behalf of the shop are kept and moved through the Autochex process. All other files that the shop has not authorized Autochex to use are immediately deleted and are never used for any other purpose.”

He said Mitchell uses encryption and other means to ensure the security of all data transferred to Mitchell.

“Mitchell treats all uploaded data as confidential,” he said. “No sensitive data is ever exchanged between business entities without explicit approval of each business partner.”

Sources at two of the Top 5 insurers INSIGHT contacted about the issue said they were assured data related to non-USAA claims was not being kept or used.

It appears Mitchell still has some distance to go, however, to reassure collision repairers. Several shop owners have pointed out that the agreement a shop is asked to sign states that Mitchell “reserves the right to use any data collected during the performance of the service for any purpose; provided, however, that neither Mitchell nor any third-party utilized to conduct the interviews…shall utilize any policyholder personally-identifiable information other than in connection with providing the service to the collision repair shop.”

SCRS’ Schulenburg said it is an issue the association is researching.

“We continue to encourage collision repairers to be aware of the full extent of information contained within the EMS extract (sent) to outside entities,” Schulenburg said. “Every collision repairer who is participating in these exchanges needs to be aware of the federal and state privacy laws, and the duty to their customer, to ensure that they are not violating any statutes as a result of any entity utilizing or selling the data. We look forward to working with the involved parties to find a solution for what we feel are valid concerns. In the meantime, SCRS encourages collision repair businesses to speak with their attorneys to ensure they are fully protected and compliant with all privacy laws.”   o

Feedback

Have a comment about this article? Send Email to Charles Baker, INSIGHT's Publisher

©2009 Collision Repair Industry INSIGHT
All Rights Reserved

FEATURED
LINKS:

INSIGHT Supports the NABC!
Do You?