IAG’s decision to repair collisions worries consumers and industry

Panel beaters and painters are raising new concerns over an insurance giant’s entry into the collision repair industry, saying consumers face less transparency.

Photo: Unsplash

IAG, whose brands include AMI, NZI and State, has developed its own vehicle repair service – known as Repairhub – in the country’s four largest cities, following a successful trial in 2019.

The Collision Repair Association has expressed concern that by referring repairs to an internal operator, insurers can self-monitor their work.

But IAG hit back at that claim, saying it’s transparent and takes its responsibilities seriously.

Collision Repair Association chief executive Neil Pritchard said consumers need better protection in such situations.

“The consumer places a lot of trust in a single entity. First, the consumer pays their premium to that company [and] then they complain to that company. This company decides the validity of the claim and now they will repair the vehicle.

“So the question is really who is on the consumer side in this transaction? »

But IAG’s executive general manager for adjacencies and supply chain, Dean MacGregor, said the company has strict quality control standards with checks at every stage of a repair.

“The customer is our first priority – the customer can choose which repairer they go to, whether it is a member of our network of authorized repairers, a Repairhub or another repairer of their choice .

“IAG takes its responsibilities as an industry leader seriously. We use the information we collect at Repairhub to continually improve service as we progress,” MacGregor said.

Pritchard also said IAG’s Repairhub business would kill off small independent panel and paint shops and therefore reduce choice for consumers.

He said the model would allow insurers to selectively refer smaller jobs, which were more profitable, to their own repair shops.

“With prices dictated by insurers, the industry does not operate under the same competitive forces as most other service providers.

“The absence of these forces creates a high level of vulnerability to changes in external costs for businesses and when coupled with the introduction of a network of insurers that can artificially capture large volumes of work from the most lucrative, it puts our ability to develop infrastructure for more complex structural repairs at risk,” Pritchard said.

He called for an overhaul of consumer protection rules for the collision repair industry in response to Repairhub.

Pritchard said a code of conduct, collective bargaining and a review of unfair terms in standard contracts would be a starting point.

But MacGregor said IAG’s goal is for Repairhub to work alongside collision repairers.

“We continue to have a very strong relationship with industry and industry bodies, and we look forward to that continuing.”

IAG first followed Repairhub — a service focused on quick, non-structural repairs — in 2019.

It has a facility in Auckland, Christchurch, Hamilton and Wellington, but said it has no plans to expand it further.