After bargaining with hospitals to reduce charges, general insurers have turned to the auto industry to bring down cost of repairs , most of which is paid for by the insurance sector. The good news is that auto companies have responded positively with the cooperation expected to dramatically cut repair costs.
In recent years, individual private companies have developed the scale and statistics to negotiate with auto manufacturers.
Bajaj Allianz, which insures over 15 lakh cars, has been sharing its claims data with insurers for several years and has been recommending changes in processes. The company has convinced auto makers to make small changes like suppling “child” parts, inclusion of anti-theft devices in low-end models and getting service centre to have high-end dent removing equipment.
Getting big manufactures like Maruti and Hyundai to supply child parts has been a major victory as it drastically brings down cost of repairs. For instance, earlier , damage to the headlight lens required the assembly to be replaced. This was expensive given that modern headlights include motordriven levelers which are expensive. “We told them that if they do not supply child parts, the cost of ownership of the car goes up because of the higher premium,” said Hemant Kaul,CEO, Bajaj Allianz General Insurance.
Vijay Kumar, an auto industry veteran, and head of motor at Bajaj Allianz General Insurance, points out that, if in a four-year car a dented door is replaced, the owner will have to bear half the cost because of depreciation. But if the dealer had hi-tech dent removal equipment, the repairs would be done at a fraction of the cost.
All private companies are making use of data and approaching manufacturers. “We have been in continued dialogue, encouraging them to introduce child parts and bring down costs,” said Gaurav Garg, MD & CEO, Tata AIG General Insurance.
Sanjay Datta, head of underwriting and claims at ICICI Lombard, said there was also an attempt to bring about a standardization in the cost of parts and labour.
Mayur Shetty, TNN
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