WHITE PAPER
Open Shop
Thinking Beyond DRP to Deliver More Customer Choice, Better Service
By: Kushal Agrawal and Scott Epstein
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.
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.
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.
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.
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
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.
Continued on back...
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 5-10% 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-$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% of MOI, up from 34% in 2005, CCC has found. At the same time,
staff appraisers were responsible for 50% of MOI in 2012, down from
61% in 2005.3
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.
Introducing 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.
1 GroupM Search, “The Virtuous Circle: The Role of Search and Social Media in the Purchase Pathway,” February 2011.
2 CCC Information Services Data Warehouse, September 2012.
3 CCC Information Services Data Warehouse, Sept 2012.
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?
vision for the road ahead™
© 2012 CCC Information Services Inc. All rights reserved. CCC, the CCC logo and the CCC ONE logo are registered service marks; CCC ONE is a registered trademark;
and vision for the road ahead is a trademark of CCC Information Services Inc.