We've "scene" it all--The SceneExchange Blog

From the shops' point of view--insurance companies

Body Shop Business has released their 2009 Industry Profile that focuses on Insurer-repairer relations.

Here are a couple of key points:

• The overall best rated insurance company is Progressive, the worst is State Farm. But even the top scorer rated only a cumulative point value of 24.5 out of a possible 45--barely over 50%.
• The insurance company cited most often for refusing to pay for OEM parts is Progressive.
• The number of respondents involved in a DRP has dipped slightly from 48% in 2007 to 44% in 2009.
• 75% of DRP shops think that repairer/appraiser relations have stayed the same vs. 50% of non-DRP.

These are just a few highlighted statistics, to see them all follow this link and download the .pdf.

I am always surprised (though I guess I shouldn't be) that the best-rated companies rank only around 50% on a variety of measures, including the expertise of their adjusters, the consistency of their policies on repair procedures and the fairness of their reimbursement policies. I, personally, would like to think that my insurance company would go out of their way to forge strong industry relations...

--Beth

Auto Insurance Goes to the Dogs

My family has four dogs. Four. We didn't intend to have four. We had three dogs—Lola, the rat terrier, chihuahua mix, Rosie, our ancient lab. Then my daughter and I ended up at a place we thought was a horse sanctuary but turned out to be, as well as a horse sanctuary, an animal rescue. There were these cute, little silky terrier poodle mix puppies that had been seized in a puppy mill bust, and we fell in love. We took two of them, and they are sleeping at my feet as I type.

We travel everywhere with our dogs, rarely going on vacation, even, without them. I'd take a dog on business trips if I could afford it/get away with it in hotels. They travel in the bed of my husband's Ford F150 if we're all traveling together, or in the back seat of my Toyota Matrix if it's just one or two of us and one or two dogs. They love riding in the car, ears flapping in the breeze out a partially open window.

I've never been in an accident when I've had a dog in the car, knock wood, but I have had a friend that was in a very serious accident where her dog's back was broken in the crash. The dog survived, and lived another several years, but the vet bills were immense. Sure, the med pay on our auto policies covers us humans, but we're left with the daunting choice of crushing vet fees or euthanasia if one of our furry friends is injured.

Three insurers have recognized this and are responding. Progressive, Farmers, and Auto Owners all offer their policy holders between $500 and $1,000 in pet coverage, at no additional charge. As Brian Dwyer from Farmers puts it, "We estimate more than 63% of our customers have pets, and caring for them after an accident can be expensive." We've got enough to deal with after an accident—an injured pet and the worries of the cost to help them heal is an added trauma that these companies are stepping up to help us avoid.

Several insurers will cover pets under a property damage claim, but there is no guarantee of that. So offering pet insurance in a collision is a great perk that, in my case, is actually a potentially compelling reason to switch insurers. 

--Chrisa

Digital Tools Overview--from Podcasts to Search Engine Optimization

Just for fun, I thought I'd put together an overview of several types of digital tools available for marketing. We use many of them here at Scene Genesis, so here's my .02 on everything from SEO to Blogs.

Blogs

If you are reading this, then you have some sense of what a blog can be like--think of it as a place for more informal commentary about subjects that are of interest. A blog can be a gathering-spot in cyberspace--sort of like a coffeehouse. Readers can, and are encouraged to, leave comments. In 2008, there were more than 112 million blogs tracked by Technorati. 33% of US Internet users read blogs.

They can include text, photos, audio and video. If you hope to begin blogging, here are a few tips:

• Commit to a posting schedule
• Write with personality--you can let opinion and individuality shine on your blog
• Build a following by linking to other blogs and posting there

Social Networks
Social networks allow users to construct a profile and connect with family, friends, co-workers and peers. They can be effective for marketing to micro-segments of customers (or potential customers). And, don't think of them just for the young, Facebook's fastest growing user segment is women ages 55+. More people use social networks and blogs than email, BTW. Bear in mind that the operative word is social--any marketing you do needs to get people talking and buzzing!

Podcasts
These are the audio or video files that can be downloaded to computers or portable media players. We do a great series aimed at information shop owners might want to hear about, Topics in Ten. Listen to a sample here. Over 17.4 million people downloaded podcasts monthly in 2008.

Search Engine Optimization

Lots of web companies will market to you based on the SEO results they can obtain for you. Simply put, if someone does a search, you want to be in the top tier of listings. SEO is the marketing and technological finesse that helps weigh things in your favor. Technically, SEO makes sure that search engines can properly index your site via keyworkds, content and links. From a marketing standpoint, it means that you are targeting specific keywords, so that your site should rank high for them.

I hope this helps give an overview of these tools and terms. Now you can toss the words around and impress everyone with your web-savvy.

--Beth

News Coverage in New York-Watch our TV Coverage

Channel 8 in our home town of Rochester, NY did a story on SceneExchange. Here's the TV spot.

Watch it here.

--Beth

As the Economy Goes Down, Fraud Goes Up

There was an interesting article in the Wall Street Journal this week about the rise in cars being dumped in lakes, burned on the side of the road, or even rolled off of cliffs.  The drivers aren't injured because many of these cases turn out to be insurance fraud, perpetrated because the owners can no longer afford their car payments.  The rise in this type of fraud is becoming increasingly common in Las Vegas, where declines in tourists coming to gamble means halted construction, less casino jobs, and more unemployment. 

And it's not just your average family sedan that's being torched in the middle of the Nevada desert - it's not uncommon for the Clark County Sheriff to find a Mercedes Benz or Land Rover on fire.  The rise has been so acute - upwards of 18% since 2008 - that the authorities in Las Vegas have taken to patrolling the desert skies in helicopters, looking for smoke. 

While I can't condone - or stomach - insurance fraud, I can understand the desperation that these people must feel, particularly in Las Vegas, where there's not many jobs that aren't directly or indirectly tied to tourism.  What can be done, in the grand scheme of all the bailouts and renegotiations going on, for us little guys?  When will the relief be bottom up, rather than just top down? 

--Chrisa

Trade Show “ROI"...Is it worth it?

For my first post, I wanted to write about a topic I was discussing with a client recently--trade shows. I am not saying that I am an expert on them, but I have attended well over 100 shows over the past decade. I've been part of small CPCU vendor fairs all the way to the elaborate CES and RIMS expos.

  One current and consistent theme among all of them is that a $5.00 20 gallon waste paper bucket still cost about $20.00 a day, and a $25.00 chair is still around $50.00 to rent. With today’s economic struggles, it is difficult to justify many of these shows because of the obvious cost as well as current attendance.

There are many shows to review each year to try and decide which ones will be the most beneficial when you weigh cost versus business. Certain shows attendance is necessary only to keep current with current customer base and not to be outdone by your competitor. Other shows are more viable for gaining new leads and contacts in the hope it will all add up to more business. I have been in the insurance claim servicing side for over 20 years and there were years where firms I worked for would do close to 40+ shows a year...with an average cost well in excess of $10K. This does not include staffing for the show, flights/hotels/food and entertainment…add another 10K for that. 

In better economic times the number and cost of these shows was irrelevant as long as it produced quality leads and kept us current with our market share. Everything is dependent however on the amount of quality prospects that attend these shows. Today companies are sending fewer representatives to these trade shows or not even attending them at all. What does that mean for the vendors that are shelling out $10K Plus each and every time? It means they are taking a hard look at whether to attend at all.

Companies are turning to alternative and creative means to get their products and services recognized, often turning their backs on trade shows. Many of these are Internet-based and very inexpensive--and you are able to specifically reach your target audience. According to Trade Show Week (3/23/09) “Not only is attendance dropping at some of the country’s largest shows, but also the number of exhibiting companies is diminished--some for economic reasons, others because of new company strategies.”

With this said, I do not foresee the demise of trade shows, instead I think it's the beginning of a new corporate culture concerning these shows. Instead of just saying yes/no to participate in certain shows, more homework will need to be done on what shows truly bring the best results. Same old, same old doesn't cut it.

Trade shows will always have a place in the business world, but the shows themselves need to do their part to make it more affordable. The shows that change and react to the times will do very well.  Those that do not will continue to see declines in attendance. I personally would like to see a few chairs and a trash can be included with every exhibit space from now on…think of it as a trade show stimulus package!

--Joe

Honoring Women in Our Industry

I ran across this press release today, and I wanted to share it with you.  Here are the highlights:

The New Jersey Association of Women Business Owners presented High Point Auto Insurance's Chief Financial Officer, Linda Schwabenbauer, with their Women Leader Award at NJAWBO's Salute to Women Leaders Award Dinner celebrating Women's History Month. This award honors women who have demonstrated leadership by supporting women through their corporate diversity efforts to help women succeed.

"High Point is proud to have such a strong leader as Linda Schwabenbauer as our Chief Financial Officer who embodies the spirit and culture of our company," said Jim Tignanelli, President, High Point Auto Insurance. "She is a role model who takes the time to facilitate opportunities for growth for the women in her department and throughout the company."

Read the rest of the press release here.

Women aren't as much of a scarcity in APD as they were 20 years ago, but this is still an industry primarily made up of men.  So it's nice to see strong women role models honored for their contribution to the industry, and their mentorship of other women.

In that same vein, please be sure to visit the Women's Industry Network site, and see what WIN is doing to recruit and mentor women.  Also, see who was honored as Akzo Nobel's Most Influential Women for 2008. 

--Chrisa

Start Spreadin' the News...We're Opening in New York State!

When: April 6th--so register your shop now!

Who: Collision repair shops in NYS

Why: Come join us! You'll get active jobs delivered right to your email. You decide if you want to submit a proposal on the job or not. No sweat. It's free to register and free to receive info about open jobs.

How: Follow this link to register your shop.

Yea! We're finally opening in our home state. All of us keep joking about crashing our cars in the parking lot just to try it out ourselves..

--Beth

Smaller Insurers Freezing Rates in Michigan

With all that's going on with the economy, and with the exceptionally bad unemployment figures in places like Michigan, there is a growing call from government officials, consumer organizations, and pundits for big companies to help the little guy out until this blows over. Last month, Michigan governor Jennifer Granholm joined the call, asking auto insurance companies to freeze personal auto insurance rates in the state for 12 months. 

Several of the state's smaller insurers heard the call and have pledged to freeze rates until February 2010. Among the 12 carriers taking the pledge are Great Lakes Casualty Insurance Company, Merchants Mutual, and Liberty Mutual. Kudos to them for putting their policy holders ahead of profits.

Conspicuously absent from the pledge were the insurers that make up nearly 50% of Michigan's market.

-- Chrisa

The Saga of AIG - How Can One Company Take Down the World?

No insurance company in the world is in the news more these days than AIG. These are just a few of the headlines since March 1:

• AIG to Rebrand P&C Business, Sell Stake to the Public

• China Life Drops Out of Bidding for AIG Asian Unit
• AIG Meltdown Has Roots in Greenberg Era
• AIG Has $61.7 Billion Loss - New US Aid May Not Be the Last
• Ex-CEO Greenberg Sues AIG for Fraud

Bernake Defends AIG Rescue, Says US Had No Choice

We have all read and heard about the devastation that would befall the world's economy if AIG was allowed to go under, and the billions of dollars lent/given to AIG by both the Federal Government and the State of New York. But can one company really have such an impact on world finance?

Yes, it can, says The Motley Fool's columnists, when companies are heavily diversified and become and empire unto themselves. They refer to history, specifically, ITT, a company that started down the road to becoming a huge conglomerate in the 1960's, and owned everything from The Hartford Insurance Group to Sheraton Hotels. By 1995, amid disasterous financial results and scandal, the company had to be broken up. 

As Morgan Housel puts it:

Almost everyone underestimated how complex the intertwining relationships between Wall Street and Main Street were, and more importantly, the relationships between the global economies. China needed demand from American consumers; American markets needed capital from Chinese savers; consumers relied on that capital to fund a free-for-all real estate market; banks rerouted the proceeds into a secondary credit market that couldn’t care less about loan quality. It was a disaster waiting to happen, and as soon as one end of the self-fulfilling cycle shut off, the entire house of cards came crumbling down in a historic way.

Andrew Sullivan backs this up, agreeing that AIG did well in its insurance business, particularly personal lines. But Sullivan states three rules for insurance companies, only two of which AIG followed:

Insurance is terribly simple, as long as you follow the Three Rules:

1. Price your risk correctly.
2. Invest conservatively so you can pay out claims when they come due.
3. Don't do anything else.

Sit back and collect the spread. That's it, folks.

Seriously, that is it. Ask Warren Buffett, and he'll probably tell you that if you follow those three rules, you'll be fine. You won't be the biggest or fastest grower, but you'll be absolutely fine.

The problems come when you get greedy and aren't satisfied with the spread. And your greed can lead to certain actions that aren't stated anywhere in the rules, including:

• Diversifying into fast-money proprietary trading.
• Leveraging your company 11-to-1.

Neither of these is a goal of a well-run insurance company, yet AIG embraced both with open arms.

This isn't restricted to just insurance companies, by the way. I hope General Electric is listening.

-- Chrisa