Thinking Beyond DRP to Deliver Better Service

New developments in computing and software technologies, smart­phones and apps provide consumers with an increasing number of options to complete routine tasks. Consumers enjoy convenience, while service providers achieve efficiencies, savings and increased customer satisfaction.

Take the example of making a check deposit. Only a few years ago, bank customers had one option. They had to locate a branch, travel there, and wait in line for a teller to make a deposit. Then, Automated Teller Machines (ATMs) came along. ATMs were placed at numerous locations, offering bank customers' convenience in when and where they banked. Banks invested in procuring and servicing ATMs, but saved over time on physical locations and related expenses.

Advancements in technology, including mobile devices, have taken convenience to a new level with some banks now allowing custom­ers to snap photos of the front and back of an endorsed check using a smartphone—and the deposit is confirmed. Convenience when and where they need it— from their homes, on the road, the beach, anywhere they want.

Similarly a night at the movies isn't what it used to be. Home entertain­ment options have been evolving. We've come a long way from the mom and pop video shop and the Blockbuster chain. Video renters used to have to find a store near them and once they did, it wasn't always convenient to pick up or return.

Redbox turned this model on its head, giving the convenience factor a boost, by placing its kiosks where its customers go everyday. Redbox customers reserve a DVD—or videogame—online. Then, they can pick up the rental at their commuter train station, a supermarket, a pharmacy, wherever Redbox is located.

But why even go out? Technology now allows consumers to select video on-demand, which is streamed directly to their television, initiated by online ordering and likely paid for using some form of electronic payment.

Bank customers and movie-watchers have lots of choices now. And it's none too soon, as consumers of every type of product and service expect it. Consumers have moved into the drivers' seat and small and big businesses alike understand that and are rallying to offer more of it.

Informed Consumers

How consumers make decisions about which services and products they choose is changing as well. Increasingly, search engines and social networks play a role.

GroupM Search conducted a study of one million Internet users to find out how they selected brands in the telecommunications and consum­er packaged goods industries. Group M reported: "Overall, consum­ers are equally likely today to use a combination of search and social media in their path to purchase as opposed to just search."¹

Consumers are turning to search engines such as Google and social networks such as Facebook, Trip Advisor and Yelp for recommenda­tions of restaurants, movies, hotels, even physicians and hospitals. Considering these advancements, it's not surprising that consumers use Google and contact their friends on social networks for advice on choosing a repair shop. They likely feel those recommendations are trustworthy.

Auto Insurance, Customer Service and Choice

Auto carriers have long worked with Direct Repair Programs (DRPs) to offer their insured options as to where they take their vehicles for repair. This approach served many purposes, including service guarantees, while providing some level of consistent business to shops. Consumers were happy to have a "short list" of shops provided to them, but could still make the final decision on where to take their vehicle.

A fairly win-win-win scenario, but these arrangements still have some shortcomings. For example, when the DRP repair shops are not conveniently located to the insured's home or office, or when the consumer prefers a repair shop based on brand recognition, previous experience, or reputation.

Another challenge with the DRP workflow is that 5 to 10 percent of consumers will go directly to a repair shop to get an estimate before filing a claim. This can create inefficiencies for the insurance carrier and repair shop as they work to process the details of the claim, and manage the repair. The ensuing back and forth can represent a potential cost of $50 to $200 per claim to insurers and a prolonged cycle time for policy­holders, according to CCC Information Services Inc.²

Extending the Repair Network

As service delivery expectations continue to evolve, opportunities now exist for insurers to expand their repair shops network which provides not only an increase customer choice, but can also help to manage costs, reduce cycle times from first notice of loss (FNOL) through completion of vehicle repair.

Delivering on choice has some cost benefits, too. There has been a dramatic shift in the method of inspection (MOI) away from carrier staff appraisers toward repair shops. In 2012, repair shops are responsible for 44 percent of MOI, up from 34 percent in 2005, CCC has found. At the same time, staff appraisers were responsible for 50 percent of MOI in 2012, down from 61 percent in 2005.³

How do you know which claims are best routed to a repair partner? Predictive analytics is playing a big role. Claim information taken at FNOL can now be immediately processed against carriers' specific rules for how they prefer to handle claims, helping the FNOL rep make decisions quickly. For example, for a repairable vehicle, decisions can be made by the carrier to select the most optimal appraisal source.

The question now is how to work with the broadest number of shops in the most convenient way possible?

Time for a New Approach

The industry is beginning to embrace all that it means to be truly 'open' and new advances in technology that are enabling auto insurance car­riers to take advantage of this trend, offering them the ability to:  

• Provide their customers with more choices and potentially more convenient options.
• Electronically communicate seamlessly with shops outside their traditional MOIs.
• Make efficient estimating channel decisions at FNOL.

Different costs are associated with each choice and these costs have been hard to anticipate in advance. This is changing. Insurance car­riers can now incorporate non-DRP partners into their repair network with minimal workflow changes and high impact on claimant choice and satisfaction.

CCC ONE^™ Workflow – Open Shop

Open Shop is the industry's first integrated tool to provide insurance carriers with the ability to electronically send assignments to repair shops outside of their DRP networks. Insurance carriers can now se­lect from among the industry's most open network. For repairers, Open Shop assignments are received and processed like a DRP assignment, and are clearly identified in the CCC ONE message center, making it simple to differentiate them from DRP assignments. Open Shop is the latest offering for the CCC ONE® platform that enhances collaboration between repairers and insurance carriers and improves the ability for each to better serve their mutual consumer.

To learn more about Open Shop, please visit http://ccc.cccis.com/openshop.

¹GroupM Search, "The Virtuous Circle: The Role of Search and Social Media in the Purchase Pathway," February 2011.

²CCC Information Services Data Warehouse, September 2012.

 ³CCC Information Services Data Warehouse, Sept 2012.