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I received an email today from a insurance company who wanted me (a distributor) to provide them with information. The email is shown below (names edited out). In addition, I show my reply. What's your take on insurance companies trying to do this?
Business: XXX Insurance
Business Location: XXX, MI
Phone Number: 800.XXX.XXX
Comments: Hello, my name is XXX and I am a glass adjuster for XXX Insurance. We are currently compiling a list of possible vendors we can use for glass quotes. We have over 200,000 insureds nationwide. I just had a few questions for you about your business.
Will you ship anywhere?
Do you guarantee your product?
Do you offer any special rates or discounts for insurance companies?
If you could please email me back along with any other information you would like to share about your company I would appreciate it. Also, if you could provide a contact name and the direct phone number or email address for that individual it would help me out.
Thank you very much and have a great day.
Now my reply...
Thank you for your interest in XXX. Please be advised, we are exclusively a wholesale distributor and therefore, are not in the business of selling product to individuals or businesses that are not directly involved in the installation of automotive glass...
>>> blah, blah, blah <<<
...I appreciate your inquiry, but we will not sell directly to insurance companies nor will we play any part in allowing insurance companies, third party administrators or any other entity of the sort, the ability to cut the professional installer out of their profits.
If you like, I would be glad to offer you a pre-authorized list of qualified installers who may be interested in providing the product and service to your insured."
Their claim is that it had more to do with locating and "difficult" parts. However, it appeared that what they wanted was more than that. A followup to my reply said that they wanted the information for "comparison"... No thanks... Not interested!
I was in a pilkington branch about three weeks ago and the manager told me the same thing. some of the details he gave me was the name of the insurance co. that was calling him and requesting information. Specificly asking him what prices that certain companys were paying for their glass. How much glass were they purchasing. And so on. He explained to me that he gave them no useful information and stated that it was none of their business what his clients are paying for parts.
As much as I am ticked that you as a vendor do not recognize and take into consideration the nags rebalance as far as your list prices, I totally respect the fact that you stood up for us as an industry for it shows we are all in this together. Bottom line, we don't make money, we can't buy from you. And if we can't buy from you, you don't do so well either. Thanks for putting them in their place though. But in my opinion, you not recognizing the new pricing structure, and not going down on the addended items, you are hurting us too. It just proves that when I am able to talk you down about 35$ or more on a high priced part, this means that it could be cheaper in the first place. And this is for the urethane manufactures, you need to go down on your prices too. Without glue, windshields don't go in, I get it, we need you. But, insurance companies dont recognize the importance of the glue because they are only paying out cost. Its only going to get worse. The Rebalance only occured in Febuary. Ins. Co.'s have gone up with the discounts about three times. When do we get to stop holding our breath???? Ooh I'm *******
I don't think my message was understood, so I decided to explain my earlier comment.
I believe the whole intent of the rebalancing was to head in the direction of direct purchasing the glass parts. You can look for the labor shift to determine your labor rates for installing their glass. Duncan has worked for them and they want to do this across the board. Be prepared!
ClassyGlassyGal: Please consider another point of view. (1) Distributors have overhead you probably can not immagine. 80% of the parts we sell everyday would not cover the overhead. (2) Member "DL" said it best a short while ago. Most retailers would be out of business if it wasn't for compression by the distributors. We are getting beat up by customers demanding better prices or they'll take their buisness elsewhere and at the same time our costs are going up. And to your point about "glue", Urethane costs are rising faster than any other items we sell, yet you think we need to charge less. Appearantly you have not considered that we are dedicated to doing everything we can to support of customers and in doing so, keeping them in buisness and profitable. At the same time, we need to make a reasonable profit. We can not continue to "compress" and most have done something about that by adding delivery charges and by moving away from the NAGS. You can do the same.
I've said it here in this forum before and in case you missed it, I'll say it again: If you do not like the price you are being paid by the TPA's, then stop signing the O&A's. Doing so negates your right to complain. So long as there are installers out there signing the O&A's and as such, agreeing to what the the TPA's are pimping, they will continue to pimp.
A couple of years ago I saw an angle that perhaps the Duncan setup might be coming to all of us in the near future. But that model has drastically changed of late and is no longer viable.
I knew of body shops doing a similiar system where all the parts are sent to them (pre-paid by the shop) and were re-imbursed for the parts and labor upon completion of the job(or 30 to 60 days after completion). But this system had major flaws. One, the shop could not control the parts (proper parts, quality of parts, etc.) as someone far away from the job was ordering them on his/her computer. Mistakes were often, parts were used parts in many cases, and all the while the shop was fronting the $$$ for all parts(including incorrect ones) until completion of the job. Talk about killing your cash flow.
But as has been stated above, the ins. co. seem to be doing a 180 in the AGR realm. In our industry they are running the other way, afraid (perhaps wisely so) of the liability of purchasing parts vital to the safety systems and structural integrity of a vehicle and being partly responsible for said parts as long as that vehicle is on the road.
But with all the mergers of late, and all the "new" tactics of Ins. co. and TPA's who knows where all of this is going. Hopefully, back to an truly "open competitive market" where the best will survive and the others will get into some other line of work.
This will take a lot of AGR shops dropping networks, and consumers to start fighting for their right to choose and demand quality work.
Can this happen? I think it can. Will it happen? That depends on how organized and motivated AGR shops are in the courts(standing up for what you are worth), with eachother(organizing a powerful lobby of our own), and in educating consumers(the hold one of the largest influences on Ins. co. still).