ATF Professional spoke to Robin Challand, Claims Director at Ageas Insurance about their green parts programme from set-up to ambition, and how it has been progressing even in this time of a pandemic
Robin, can you provide us with an update of where Ageas is when it comes to green parts?
Green parts are part of a broader strategy that we’ve been looking to roll out in claims. First of all, in the last 12 months, none of us really saw what was coming until it was really upon us. And that’s thrown lots of challenges up, particularly in the insurance industry.
From our point of view, we wanted to make sure that, first and foremost, we were still delivering service to our customers during lockdown. There were, of course, some changes, particularly in the motor frequency space, but there was also an opportunity to bring green parts to life.
Twenty-two days before the first lockdown, we decided to combine our salvage operation with our green parts supply, which significantly increased our capacity for green repairs; we incorporated green parts into our claims processes.
By integrating the two, meant that parts from Ageas’ salvaged vehicles now feedback into our repair network as ‘green’ car parts.
It was actually back in 2019 that we first started our initial trial using green car parts and how they complement our repair journey. We recognised that there was an opportunity to make repairs greener and that a brand-new part to fix a vehicle was not always necessary. We piloted several different activities, and we worked with a number of our repairers around the process of getting green parts into the repair basket.
We looked at this from a customer point of view. Customers are increasingly aware of the environment, and they want to make sure that although it’s a car, which by itself isn’t necessarily environmentally friendly, they’re doing the right thing. And when we started looking at it, even a small percentage of the green parts basket made a difference.
Having seen the take-up and the positive impact that the green parts were having on the customer, and we made the relationship work between our repairs and the green parts provider, we then looked at how we could combine both our salvage provision and our green parts. We used Hills Salvage and Recycling Ltd (Hills Motors) as part of that salvage relationship (Hills also have The Green Parts Specialists as part of their wider group). Between Hills and ourselves, we started to bring those two parts together.
We started in March last year (2020), and in one way, that was bad timing because of the pandemic. On the other hand, it gave us some resilience to some of the challenges around supply chains and parts and some of the cost inflation that we saw come through during the course of last year.
The Green Parts Specialists remove car parts that could have a second life as green ones from AGEAS’ salvaged cars, and all of the vehicles and parts are electronically tracked, allowing Hills to create a huge database of what parts it has available, where they are located now and where they came from originally. We were able to do other things to get our customers back on the road quickly and gain access to parts that we needed.
When it comes to green parts, do you find that repairers are resistant to using them, and do you think that the general public is accepting green parts, or do you think further awareness is required?
Firstly, when we worked with our solution centres (our repairers), they were really keen, and they helped us develop the process and the way we work with Hills and the green parts team because they could see the benefits. They would offer green parts to a customer, so we haven’t really met any resistance. Repairers have embraced it, and we’ve made sure that the connections and the understanding are there. We have put a lot of time and effort into that part of it.
When it comes to customer perception, most of our policies reference that a green part or an equivalent part is put back on the vehicle. We’ve made sure this is clear in our policies, and it is referenced during our first notification of loss journey. The repairer also discusses this with the customer, so it doesn’t come as a surprise to them. We don’t have to do a hard sell because, on the whole, customers understand and they see the benefit; they get their car back, and the cost of repair is slightly lower, which then feeds into their renewal premium itself.
It’s about using green parts in the right way and at the right time in the journey. We empower our repairers to make the right decisions on the repairing. We’ve got a network of ‘solution centres’; named so because it’s about coming up with the right solution to get the vehicle back on the road for the customer.
We believe that empowerment works two ways; it builds confidence in the relationship that the repairer has with us, and it means that there is trust and knowledge to get things done in the right way for the right price.
Can you tell us about any challenges Ageas has had whilst setting up the use of green parts as part of their claims process?
It’s important to say that this wouldn’t have happened without our repairers and Hills – The Green Parts Specialists (GPS); three parties working together.
The first challenge was working out how we’d all work together. You’ve got to find partners that you can work with, understand, and share doing something different and we’re pleased to say that’s what we have with Hills, GPS and our repair network.
We’ve changed the dynamic in terms of the access to the parts information that the repairers have got. The Green Parts Specialists (GPS) have worked with the repairers to enable them to see what the inventory looks like. And over the past 12 months, the inventory has doubled in size from 500,000 to 1 million parts.
At the start of the pandemic, we had a single-digit percentage in terms of green parts in the basket, and we were worried whether we would be able to increase that. Now we have gone beyond 20% of the parts basket. In 2020, around 7000 green parts were used; despite lockdown, we’ve still seen an increase. By understanding the inventory available and understanding the communication between the different parties, all of these aspects have really helped.
Where do you see Ageas going in terms of using green parts now that we are coming to the end of the pandemic?
It is undoubtedly going to pick up as the restrictions are relaxed, but I think there will still be home working; it might not be every day, but I think, as a result, some of those peak hour traffic periods are probably not going to be quite as congested, people probably won’t travel quite as much. We’ll see volumes returning, but probably not immediately to where they were in 2019. It will result in a change in dynamic and allow us to see the volumes that we were expecting to come through during the year and what we’re going to set up for that. We will continue to deliver a great service and get the customer back on the road at a really good indemnity cost.
At the end of 2019, 3% of invoiced jobs had green parts; we’re now at about 21/22% a month, and through the course of the year, we’d like to see this figure rise to the high twenties so that over a quarter of parts in the repair basket are green parts.
Of course, we would like to see 35-40% of green parts being used, but we are realistic, we want it to grow with all the stakeholders from customers, repairers and Hills, but we have to get there in the right way.
Can you tell us about the relationship Ageas has formed with GPS?
The engagement with Ian Hill (Owner of Hills /Green Parts Specialists) and his team has been really strong. We have challenged each other on how we should build the green part’s programme. Ian generates some excellent ideas, so it’s been strong in both conversation and development of the process. Ian is building and strengthening the team behind him and his distribution network to structure the whole approach to green parts.
With each month that goes by, we get another month of experience, and we are keen to make sure that we’ve got market-leading customer service. We want to make sure that our repairers can do the job that we want them to do to the best of their ability. And from Ian’s point of view, we’re pulling all of that together and gaining another month’s experience. From that model, we adjust it, move forward, and occasionally take a leap forward when we bring other technologies into it. By partnering with our supplier, we can explore how we can both help each other evolve.
What do you see as the future for Ageas’ green parts programme?
Our ambition is to use even more green car parts in our repairs. This will help us put money back in our customers’ pockets by lowering the cost of repairs and ultimately the cost of their premiums.
The demand from our repair centres for green parts has been phenomenal, so we’ll continue to work with Hills and The Green Parts Specialists to expand our access to green parts.
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