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Green Parts – what’s preventing their adoption?

David Williams, AXA - What's preventing the adoption of green parts
David Williams, AXA Insurance UK

Scaremongering is the biggest problem for insurers when it comes to promoting and using vehicle recycled parts or ‘green parts’. This is the viewpoint of David Williams, Managing Director, Underwriting and Technical Services at AXA Insurance UK when asked at the ATF Professional conference held in November 2019.

So what is stopping the insurer adopting green parts?

He believes ‘the biggest thing stopping the insurer’s adoption of green parts in this country (as they control the vast majority of repair costs), is because they, as insurers are scared to be pushing it forcibly, as there are many people saying that insurers are going to make vehicles unsafe’. Although he stated there is no proof of this, converting public opinion is key to its adoption. 

Understanding the reason for this scaremongering is important. He mentioned that there is vested interest from people to stop the use of green parts. He pointed out how established deals between repairers and other individuals stop repairers wanting to endorse sustainable approaches. Also he wished to be honest and open and agreed that if the potential margins from parts were reduced for repairers then they should be able to make it up elsewhere. 

However, he felt a tipping point for the public to adopt green parts is coming. The awareness of climate change is becoming paramount and is being embraced. The certification of green parts, tracing their identity and to be able to show that they have been checked and tested will only help to make the public feel more at ease. He said that the relationship between insurers and repairers are now changing to ‘labour only’ deals and one reason for this is that they could look after the supply chain. By taking control of the supply chain the insurers could help facilitate and guarantee the quality of green parts to the end consumer and take that responsibility from the repairer.

He also said, what is important to controlling the supply chain is the effect that Brexit may have. If there is a delay in a repair, then extra costs are incurred including providing courtesy vehicles. He felt that if the supply could be controlled, then insurers could work with partners to deliver reused certified parts. 

When raising the issue of indemnity, he questioned suggestions that using a green part was in breach of this because the customer was not in the same financial position as they were prior to the loss of the original part if such a part was used. He refuted this and asked why this has never been tested in court. He suggested that in the past, if individuals raised the indemnity question, it was easier for the insurer just to readily agree to use a new part but he now believes insurers would be more prepared to ‘push back’ if challenged. 

Finally, he mentioned legislation; if insurers get on board and recognise Brexit as a potential tipping point and realise that legislation is going to come through, then these factors, combined with environmental responsibility will help future generations and produce a massive business opportunity. The scaremongering from individuals with vested interests, the fear of a loss in a markup or whims from large companies is making items go to waste and missing opportunities for recycling.

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The views and opinions expressed on ATF Professional are solely those of the original authors and other contributors. These views and opinions do not necessarily represent those of the editor, publisher or staff of ATF Professional.

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Owain Griffiths

Owain Griffiths

Head of Circular Economy at Volvo Cars

Owain joined Volvo Cars in June 2021 to lead Circular Economy in the Global Sustainability Team. The company has committed to being a circular business by 2040 and has financial, recycled content and CO2 based targets for 2025, all of which Owain is working across the company to make happen. Owain previously worked for circular economy consultancy Oakdene Hollins where he advised businesses on evidence led circular economy implementation. 

Turning into a circular business and the importance of vehicle reuse and recycling.

The presentation will cover the work Volvo Cars is doing to achieve 2025 but mainly focus on the transformational work towards 2040 and the business and value chain changes being considered. Attention will be paid to the way vehicles are being dealt with at the end of life and the complexities of closing material and component loops. Opportunities and challenges which Volvo Cars is facing will be presented including engagement with 3rd parties and increasing pressure from stakeholders.

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e2e Total Loss Vehicle Management [e2e] is the UK’s only salvage and automotive recycling network with nationwide, environmentally compliant sites delivering performance resilience and service reliability to the insurance and fleet markets.  The network’s online salvage auction www.salvagemarket.co.uk drives strong salvage resale values and faster sales.  e2e’s salvage clients have access to the network’s stocks of over 5 million quality graded, warranty assured reclaimed parts. 

The power of the network model means e2e has the ability to influence industry standards and is committed to continually raising the bar whilst redefining the role and perceived value of the salvage operator.  Network members adhere to robust service level agreements, against which they are audited, in order to ensure performance consistency and a market leading customer experience.  

The salvage and recycling operating environment is evolving rapidly, and e2e is anticipating, listening and responding to changing market needs.  Regulatory compliance, ESG, reclaimed parts, customer experience, EVs, new vehicle technologies, data and reputation risk are just some of many considerations linked to the procurement of salvage services.  e2e will drive further added value to clients and members through the adoption and application of emerging technologies, continuing to differentiate its proposition and position salvage services as a professional partnership. 

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