More On Salvage Strategy and
Your Claims Department
i also spoke with John Kett, president and CFO at insurance auto auctions, about how each
claims organization can cultivate an efficient salvage strategy. Here is what he had to say.
Village, Calif.-based company, which
has been charting customer satisfaction levels in the auto physical damage
realm for more than 10 years, acknowledges that some dissatisfaction is largely unavoidable.
“Auto claims resulting in a total loss
tend to be more complex, compared with
vehicle repair claims, because in addition
to filing a claim, claimants also have to
purchase a replacement vehicle,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates, in reference to the 2011 survey.
Regardless, there are ways to ensure
the policyholder/insurer rapport does
not go the way of the wrecked vehicle.
To speed processing, and thus the road
to indemnity, insurers must take a long,
hard look at the work flow, including
“A huge amount of focus historically
has been on what gets written into the
estimate,” says Paul Rosenstein, vice
president of claims solutions for Mitchell
Q: how can insurers integrate salvage in the overall claims process?
A: In today’s competitive P&C insurance industry, integration is critical to improving
efficiencies in the claims process. When you think of claims, you think of paying money out
to repair or replace a vehicle. However, salvage and subrogation are the two areas where
claim costs are recovered with a corresponding impact on claim severity. In fact with total
loss claims, both cycle time and returns—that is, vehicle selling prices at auction—are
key metrics to measure the overall salvage process.
More so than ever, insurance companies are turning to IAA for further innovation in the
total loss process and to find improved efficiencies. To that end, IAA leverages more than
30 years of experience and data to provide insurers with market value information that can
be used in the total loss valuation process to potentially facilitate faster settlement.
IAA has provided insurance companies additional efficiencies by streamlining the
information and time it takes from assignment to vehicle sale. We have worked with
insurance clients to hone in on the least systematic parts of that process, one in particular,
title procurement. By offering solutions that ensure titles are secured faster, we can
help accelerate the time a vehicle comes into our facility and can be sold. Using mobile
technology is also essential in ensuring that insurance clients have anytime/anywhere
visibility about their salvage assets. This means decisions on a particular vehicle can be
made and completed all from a Web-enabled phone or mobile device.
Q. What are some basic considerations when selecting a salvage
A: Our client feedback has indicated there are several factors that insurance companies
look at when selecting a salvage provider, but three are universally focused on: returns,
cycle time, and customer service. IAA’s strong global buyer base representing in excess
of 110 countries ensure a healthy, competitive bidding and buying market. Our returns
were record-setting in 2011 and the IAA auction model combining both live and live on line
auctions support our high selling prices. Live auctioneers, ring men, and run and drive
lanes at every IAA auction assist in driving prices higher than those of an online only sale.
With speed in mind, our facility footprint ensures that we can secure vehicles quickly.
In addition, we offer services to further reduce cycle time including our accelerated
pick-up solutions, title procurement services, and I-Buy Fast,® which is IAA’s ‘buy now’
purchasing option, all with the goal of securing and selling vehicles faster.
IAA sold nearly 1.4 million vehicles in 2011 and provides salvage auction services to 8 of
the top 10 providers, including several exclusive contracts. IAA is more than just a salvage
auction and our dedication to our clients includes service level agreements, a strategic
account management approach, and insight into the drivers of the salvage industry.
Q: how can insurers—and claims specifically—use this as an
opportunity to boost the bottom line? What about as a means to
enhance policyholder satisfaction?
A: Insurers can achieve meaningful results with IAA in terms of salvage returns, reduced
claims cycle time and improved policyholder satisfaction. IAA was the first salvage auto
auction to publish a report, IAA’s Salvage Report, which details the factors driving the
salvage industry. This, we feel, demonstrates our commitment to the industry and our clients.
This focus on drivers of salvage selling prices in conjunction with our auction model ensures
that our sales remain highly competitive with the benefit to the insurance company.
Innovation and technology are core to our goal of reducing cycle time and increasing policy
holder satisfaction, which translates to vehicles being towed faster and claims being closed
sooner. By surveying and understanding the needs of the insurance client community, IAA was
able to develop a unique set of solutions and services, including expedited pick-up and title
procurement that provide measurable results to our clients in terms of days and dollars.
Q. What creative salvage solutions are you observing?
A: The salvage industry continues to be a dynamic market affected by many factors
including the used car market, the U.S. dollar index, metal trading prices, gas prices, global
buyer penetration, and many other factors. Monitoring these factors has truly become a
mission at IAA. In fact, we have developed a core discipline on ensuring we truly understand
the salvage market and the clients, both buyers and sellers, who utilize our services daily.
In addition to viewing the industry’s movements, we are working to innovate how
business within the salvage industry transacts. Today, the salvage industry is a fast moving,
global market place and technology has allowed new and different portals to the salvage
buying and selling world. Our website is available in six languages: english, Spanish,
French, german, Polish and Mandarin Chinese. In addition, IAA leads the industry in mobile
technology that results in our clients being able to bid and buy at any time, in any place, and
on any of our inventory. By embracing mobile technology, buyers can bid and buy more, and
provided our sellers with additional transparency to the performance of their assets.