Adam Murray, Motor Technical Manager at AVIVA, presented at a recent webinar for the vehicle recycling industry, hosted by ATF Professional. In his presentation, ‘Together We’re Stronger’, he sums up how essential it is for all vehicle recycling industry stakeholders to work collaboratively.
With more than 30 years of involvement in the motor insurance industry, in various roles looking at industry opportunities and problems. Adam wanted to bring to light the challenge presented in the value chain from the customer, supplier, and insurers’ perspective.
Adam said that there is significant change and transformation ongoing in tier-one suppliers in the UK in the motor salvage sector and that there are some gaps that further stricter compliance or regulation measures could help reduce within this industry.
He said that he believes the government have some responsibility to take control – Many damaged vehicles are disposed of each year outside the insurance sector, often without any compliance levels and where no legislation exists to provide a governance framework setting out the requirements to the general public and those operating within the sector.
More and more badly damaged vehicle salvage is found being sold outside the ABI Code of Practice on social media networks, and having looked at a significant number of vehicles advertised on these sites, Adam’s belief is these vehicle salvage examples should not be sold as they cannot be repaired and the person selling this salvage does not have the required certification to allow them to sell hazardous waste.
On reclaimed parts, he said, “I started to look in earnest at reclaimed parts several years ago and identified several blockages to overcome to make them more acceptable to increase usage within the insurance repairs of customers vehicles. The challenges I see are that customer perception and acceptance are critical to making this process acceptable.
To ensure this confidence exists, I believe operating to a standard cementing the process and brings credibility to it. VRA as stakeholders play a crucial role in introducing a standard for reclaimed parts brings credibility, transparency and traceability which customers will appreciate. The next steps are introducing a simple assessed outcome test to prove competence in the staff grading the parts for consistency. Imagine the credibility of the introduction of such a test would bring to the personnel within the yards and the general public’s perception.
Notwithstanding the above, the last point I believe will introduce credibility into the recycling yards when a member of staff can visualise a succession path from taking vehicles into the program, dismantling them and gaining recognition for grading the parts for a certified program of recycling.”
Other issues that need to be closed off is the sale of non-repairable salvage outside the UK. He said he has seen many examples of scrap salvage category vehicles that have been exported, badly repaired and re-entered into the UK, and these botched-up vehicles could present a serious risk to road users in the event of a further accident.
He questioned why money is spent at the back end, trying to close down chop shops with police funding when legislation could assist in addressing the demand at the front end.
Adam said that the biggest opportunity is through all parties, recyclers, repairers, customers and insurers working together to develop programs where reclaimed parts become accepted and embedded in repair programs, particularly appealing to fleet customers.
He added that it is essential for all parties to work collaboratively, to train staff effectively and test the model to ensure it works, to minimise the exposure by developing standards that set out ‘what compliance looks like’, then introduce measures of enforcement to ensure the check and balance deliver full compliance – perhaps in the future endorsed by regulation exists.
He said, to make any scheme, such as reclaimed parts work, there has to be defined scheme rules, a seamless straight through IT process and common understanding of what is expected from suppliers, repairers and insurers to deliver on the promise set out within the motor insurance contract. IT infrastructure is another factor that must be embedded at the heart of the process to ensure straight-through processing.
To make all this work, the contract of insurance needs to be clear and transparent confirming the use of the right reclaimed parts in the vehicle repair process.
