AA Insurance goes into the Panelbeating business

SMART repair image

The panelbeating industry is a tough business these days, and it’s about to get tougher. As car technology and road safety improve, the collision repair industry shrinks. The accident rate has been trending down for decades and while a good thing in itself, the repair sector is being squeezed, and at the same time working harder for lower rates.

Insurance companies have tight controls over the car accident repair market, but at least customers can (usually) still choose their own panelbeater or accident management service in most cases.

This about to change. As expected, AA Insurance have just announced (NZ Herald, March 20) they’re going into the panelbeating business. Their first SMART (small to medium area repair technology) repair shop is due to open in Auckland soon, with the intention of ring-fencing all drivable car accident claims. Anything left over will be directed to a privately owned ‘AA approved’ panel shop. The AA Insurance spokesperson says “We do not expect the introduction of a SMART shop into our Quality Repairer Network to have any significant impact on our existing repairers.” Hmmm, we’re not sure how that’s possible? AA Insurance says they need to do this to improve customer service and reduce repair times. Hmmmm, Crash Management contracts over 100 high quality panelbeating shops throughout the country and we (and our clients) believe these owner/operator facilities provide outstanding customer service. Our clients include some of the largest vehicle fleets in NZ, and they know that professional accident management minimises time-off-the-road and provides a fast, efficient, professional result. Why therefore is the SMART repair shop really needed?

AA Insurance is a joint-venture between the Automobile Association NZ and SunCorp, one of Australia’s mega-insurers. SMART repairs are used extensively in Australia and are sure to grow in NZ. Australian corporates, particularly banks and insurance companies, have a reputation for imposing ‘Aussie Rules’ in NZ to maximise their profits and generally kiwis don’t like that. Should the NZ collision repair industry be afraid?

11 Responses

  1. ShaneM
    | Reply

    Yes we knew it was coming another nail in the coffin of the NZ panelbeating industry. As if the Aussie insurance companies haven’t already ground our business down enough already. Look any thinking person can see this for what it is – just another level of control. It doesn’t work in Aussie, customers hate it and complaints are rife. Google SMART REPAIR COMPLAINTS for the results of this ‘new improved customer service’. It’s so bad even the Aussie government’s involved. Check out the debate – http://www.parliament.nsw.gov.au/prod/parlment/hansart.nsf/V3Key/LA20130312017

  2. Vicki
    | Reply

    We have been dealing with Karen @ Crash Management and find her to be very helpful, have used this service for our clients and have had excellent reviews. From a claims management point of view I couldn’t recommend their service enough

  3. BruceB
    | Reply

    Googled SMART REPAIR COMPLAINTS – 959,000 hits! Where to start. Some of these are really really bad. Here’s a post from John with a BMW328. Here’s hoping kiwis don’t have to put up with this rubbish.

    Drives: BMW F30 328
    Join Date: Sep 2012
    Location: Melbourne VIC

    Posts: 121
    iTrader: (0)

    Don’t ever use AAMI or smart repair
    A cyclist recent hit my car and I’ve claimed my insurance which is AAMI to repair and repaint the hood.
    First time taken my car back from capital smart repairs the colour of the hood was Mis matching.
    I’ve rang AAMI and took my car back in again for 2nd time, took the car back today and all they did was scrap the top colour off which caused the Mis matching and now my car has all kinds of visible scratches on the hood.
    The assessor named Bradley ( from the murrumbeena centre) told me that BMW aw has no clear coat, I’ve challenged him on this one after I confirmed aw does has clear coat.
    Btw, when I went to take my car back this morning, the battery was flat, Bradley said they forgot to turn off the interior light, no sign of feeling sorry.
    I will ring AAMI again this weekend when I have sometime.
    But people do urselves a favour, don’t go with AAMI just to save some small money like I did and NEVER, I mean NEVER go to CAPITAL SMART.
    Like their name, those guys are a bunch of SMART ASS.
    BMW F30 328i Sport Line

  4. BruceB
    | Reply

    Endless fun! AAMI strikes again. This is worth reading.

    PostPosted: 09 Aug 13 21:42
    Post subject: AAMI repair quality not good enough.
    Organisation name: AAMI Registered company is listening
    Issue type: Complaint

    I recently have an accident where my car was hit from the rear. Rear bumper was damaged.
    AAMI has sent me to a capital smart repair centre in Silverwater 2 weeks ago. Repair involve rear bumper plastic mould and steel reinforcement bar.

    After I took the car home from repair, I realised they re-use my rear bumper plastic mould which has deformed and they just repainted it. This cause the gap between the boot door and bumper uneven.

    I reported this to AAMI this monday, and followup on tuesday. No one bother go get back to me on arrangement. I called capital smart silverwater myself and the lady said I can take the car back anytime for their assessment.

    So, I took the car back to capital smart silverwater for assessment. I can see from the reception area that they try to use force to bend the middle part of the bumper plastic mould down to level the gap (The bumper alignment to the boot door was kind of concurve up, with the least gap near the centre where I was hit). I am also very horrified that they tried to twist/bend my boot door trying to get it aligned evenly with the bumper! (My boot door was not damaged). They were not successful to rectify the gap I complained about. (Now, I am worried if they have done any damage to my boot door, but most likely not enough to warrant any action if there is.)

    So in the end, they told me it is an old car (year 2000 make) and it’s probably expected bumper plastic mould doesn’t align evenly to the door being in the sun for a long period of time over the years. I disputed this, given the bumper was hit, the plastic mould would deform in shape causing it not align evenly to the door and they should get a new mould to repair back to the condition it was in prior to the accident. They told me if I am not happy, I can take it to AAMI’s assessment centre in Haberfield and that’s it.

    So, I had booked an assessment at Haberfield mid next week and I will see how it go.

    As far as my first claim experience with AAMI, the progress so far is not good enough, especially the practice to re-use parts that was hit in the repair.

    PostPosted: 10 Aug 13 08:43
    Post subject: AAMI repair quality not good enough.
    Organisation name: AAMI Registered company is listening
    Issue type: Comment

    I think your gripe should also be with capital smart silverwater who did the work in question and then seem to have provided excuses not reasons, as well as with AAMI who were less than crisp when you reported you were unhappy.

    It is AAMI’s responsibility to assure proper repairs, and an insurer like AAMI who controls the lot should have a process to QA repairs prior to returning a vehicle, but that is universally left to the vehicle owner. If the panel shop says they repaired it properly, AAMI believes them until it is shown otherwise.

    Be aware most policies have an out whereby they do not need to make a vehicle better than before it was damaged, and allow used parts reflecting the age and condition of the originals prior to the damage.

    It will be interesting to hear how you go with a 13 year old car, apparently in good nick, with a repair you are not satisfied with.

    An underlying problem with AAMI’s “effective and efficient” process is that panel shops are usually expected to quote against photos not through inspecting the car. It might be efficient but is it effective? AAMI thinks so or they would not do it. Repairers bid against the damage shown in detailed photos and the low bid gets the work. There are anecdotal stories that getting any change to the approval is a fair hassle, and hidden damage can be arguable as a judgement call between the panel shop and AAMI.

    Consequently, quality of repairs are stacked against the owner for a good outcome because of AAMI’s absolute control over the quotation systems and repair costs. Hence the repair guarantee to provide some level of confidence in repair quality, that may or may not be warranted.

    Please report back on how this goes.

    PostPosted: 16 Aug 13 21:36
    Post subject: AAMI repair quality not good enough.
    Organisation name: AAMI Registered company is listening
    Issue type: Comment

    Maybe the gripe is with Smart also. AAMI has sent me back to Smart. Will be going back to them next week…

    Back to top

    PostPosted: 30 Aug 13 19:51
    Post subject: AAMI repair quality not good enough.
    Organisation name: AAMI Registered company is listening
    Issue type: Comment

    Latest update, been to Smart workshop at Silverwater 3 times, they can’t fix it. Been to assessment centre 3 times where they finally have the car sent to another workshop. Going to take approx. 2 weeks wait for parts, but they gave me a hire car while waiting for the car to be repaired.

    Back to top

    PostPosted: 30 Aug 13 20:56
    Post subject: AAMI repair quality not good enough.
    Organisation name: AAMI Registered company is listening
    Issue type: Comment

    It reads like AAMI has run you around the block, but you might be getting your car fixed properly. Too bad they could not get it right the second time, if not the first. That is not the best look for AAMI.

  5. Ian Harris
    | Reply

    I’ve just found this blog, it’s an interesting forum for the wider industry and reasonably balanced though clearly some vested interest from both sides. I think the panelbeaters are being somewhat naive however, from an outside view it would appear you’re in a twilight industry and there’s nothing to be done about that. Recent historical examples include wheelwrights and blacksmiths, all now redundant. Time and technology moves on. The Herald article this morning reflects the acceleration for the collision repair sector – it’s suggested that cars will be self-driving by 2020, traffic lights will read the car/driver requirements, and cars will talk to each other to avoid collision. End of panelbeating requirements as we know it. Perhaps the SMART (haha) thing to do at this point would be to put away your tools today and let the underwriters inherit the mess. They may then finally acknowledge their dependence on a sector that the respondents above say is being treated so harshly.

  6. Reg Parker
    | Reply

    Heres another outstanding result from SMART repairs. The good times just keep rolling. Brace yourself Auckland AA Insurance customers this is coming to a place near you. Read on and if it happens to you, see your friendly local panelbeater for quality and service.

    User #248798 2262 posts
    Whirlpool Forums Addict
    reference: whrl.pl/Rc2OL5
    posted 2012-Jan-4, 7:36 pm
    Hi folks!

    As some of you are aware I’ve posted good reviews about the Capital SMART repair down here in Melbourne (Sunshine, West).

    Well, I would like to regret those post as I just got my car back today, this afternoon and noticed that the rear bumper does not colour match the entire car itself.

    I had contacted AAMI but had been advised to contact the SMART Repair Centre first down in Sunshine to get a resolution. If, however I am not satisfied with the issue or the problem is not resolved I will need to contact AAMI back to get them to escalate it further and deal with it on my behalf.


    1. Shouldn’t be AAMI be doing this on my behalf instead of chasing it up with SMART? (I have emailed the centre as their contact centre is currently closed now. Hopefully for a reply or call soon tomorrow latest).

    2. Has anyone been in this situation before? If so, what type of procedure should I take to make sure I go through a hassle free step in getting my rear bumper replaced done again!

    I should of listen to my mate. Take it to own panel beater, even it cost a little bit. They do job well done. Now I have to waste my time going through this process again and hassling these people now.

  7. C. Adams
    | Reply

    This looks very ominous. As a consumer , I don’t appreciate being dictated to, companies have to understand that customers have rights and making your own choice is fundamental. I’m an AA Insurance customer and also a Crash Management customer, and I know who I’ll be calling if I have another car accident claim. Being told to drive to a south Auckland assessing depot was NOT good customer service. Fortunately a work colleague recommended having Crash Management look after everything for me including a nice courtesy car and pick-up service all at no charge – that was EXCELLENT customer service. If it’s true what’s being said about the ‘all new improved AA Insurance accident repair SMART service’ being imposed on customers, I’ll be looking for a new insurance company. Any suggestions? It looks like they’re all Australian corporate-owned anyway, are any of them any better?

    • Phil
      | Reply

      AAMI will give you free choice to find repairers, but subject to a quote from their pet repairer and a review in impossible time frames. Then you can get your car repaired at Capital Smart in a few days, or you can wait 6 weeks for it to be assessed by AAMI. Last trip to Capital Smart involved 4 returns, with excuses like, that’s as good as we can make it (lights not even in place and proximity sensors of different colours that don’t actually work). AAMI were such a good company, now the Suncorp reverse Midas touch has been invoked. Time to sell those shares!

  8. Francis Shortfield
    | Reply

    Shame on you AA. This kind of car accident repair service obviously doesn’t work in Aussie so why bring it here. The customer has the right to choose their own quality panelbeater, that’s what insurance premiums are paid for. Insurance companies take the risk, when they lose the bet they should have to pay a fair price for a quality repair AND good customer service.

  9. Suze
    | Reply

    Hot topic both here and in Aussie where the NSW Government is launching a parliamentary inquiry into the relationship between insurance companies and smash repairers – and the lucrative industry that repairs more than half-a-million cars each year.

    It follows complaints that some insurance companies are trying to muscle-in on the crash repair industry – driving smaller repairers out of business – and are cutting corners by using mostly non-genuine parts, which car makers say can compromise a vehicle’s safety.

    In North America INSURANCE COMPANIES ARE BANNED FROM OWNING SMASH REPAIR BUSINESSES because of concerns that the focus on cost could lead to compromises in safety and the quality of vehicle repairs.

    Australia’s largest vehicle insurer by market share, Suncorp – which also operates under AAMI, GIO, Just Cars and Shannons – owns 23 smash repair shops across Australia, including nine in NSW.

    Suncorp began acquiring majority shareholdings across its stable of smash repair shops three years ago.

    Suncorp owns 60 per cent of ‘Q Plus’ at Riverwood, which is said to be the biggest crash repair shop in Australia and among the largest in the world, with up to 120 cars repaired each week.

    Suncorp also owns up to 90 per cent of the ‘Capital Smart Repairs’ chain and has a 51 per cent share in the Australian division of US parts supply giant, LKQ, that specialises in non-genuine replacement parts to the crash trade.

    Australia’s second-largest insurer, NRMA, bought into two crash repair shops in Melbourne in December 1999 but sold them in July 2013. To hard?

    NRMA Insurance owned a handful of smash repair businesses in NSW in the 1980s and 1990s but sold them more than 10 years ago.

    “The US doesn’t allow insurers to own smash repair shops because it’s deemed there is a conflict of interest: cost versus what’s best for the customer,” said James McCall, the former CEO of the Motor Traders Association in NSW and who is now the Chairman of the Motor Industry Advisory Council established by the state government.

    When asked why Suncorp predominantly used non-genuine parts in the repair of its vehicles, Mr Newlan said “we’re transparent about it, it’s in the product disclosure statement that we use genuine and non-genuine parts, or a combination of both”.

    “The increasing complexity of all modern motor vehicles, in the metal materials and computer systems, which guarantee crash safety, make it absolutely vital that genuine parts are used in crash repairs,” said Mercedes-Benz Australia spokesman David McCarthy, who suggested a car repaired with non-genuine parts should be crash-tested to highlight the differences.

    The prospect of Insurance company owned collision repair shops is not looking positive for customers or the panelbeating industry in NZ?

  10. Gary No Glitter
    | Reply

    ATTENTION ALL PANELBEATERS: Close the doors now, the last nail in the coffin has just smashed the panelbeating industry.

    Who’d have thought 10 years ago that insurance companies in NZ would be setting up their own collision repair facilities or that a dozen insurers would morph into a duopoly. With giant IAG now owning NZI, State, Lantern, AMI etc and monopolising 60% of the car insurance market, who’d have thought they needed to buy out Lumley Insurance or that the Commerce Commission would let IAG’s market share leap to 70% – how is that not a monopoly in the tiny NZ market?

    It’s happened though and yesterday the Commerce Commission released its ‘surprise decision’ (no surprises there) to allow this to happen. http://www.stuff.co.nz/manawatu-standard/news/business/10018411/IAG-cleared-to-buy-Lumley.

    Its time for the Collision Repair Association to admit defeat. The panelbeating industry is no longer sustainable, you can’t make a living let alone a return on the huge investment required, and it’s going to get worse. Our biggest asset Customer Loyalty has been wiped out because insurers especially IAG direct customers where their car must be repaired. Our businesses are now worth only the plant & machinery, and carrying on working 12 hours a day for the same salary we pay our staff is not going to change any of this. Time to quit, join the easy life, and sign up as an insurance assessor.

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