Rob Smale, Non-Executive Director – e2e Total Loss Vehicle Management, discusses network advantages in the salvage and vehicle recycling sector and resilience in the face of a changing ‘squad’.
We are surrounded by networks. Think railways and National Grid; both are networks. We can’t function in our jobs without a network, be it a LAN, WAN or other TLA. LinkedIn exhorts us to create business networks so that we can share insights, find experts, and interact professionally and socially online. I came across another type of network when I blundered into the world of insurance claims from engineering in the 1990s. Rather helpfully, I thought, there were companies managing networks of local suppliers providing a UK-wide fulfilment service. Years later, I now have the privilege of working as a NED with two the of best supplier networks serving the claims industry, and I am reminded of why they are such a great choice for claims teams.
The benefits of a network include:
- real UK-wide coverage with local knowledge;
- one management and audit function;
- multiple sites reducing travel and lead times;
- diverse sources of investment and ideas;
- strength in depth.
After insurance claims, my other passion is Welsh Rugby, and it’s the current plight of the game in Wales that neatly demonstrates the importance of, “strength in depth”. Reliance upon a small number of players without developing a wider bank of talent will bring short-term success at the expense of the longer term. This is a metaphor that insurers could take note of.
The Welsh Rugby Union should learn a thing or two from e2e. In the last 18 months, e2e saw two-star players, SYNETIQ and Hills, transfer to other teams. After both exits, the e2e squad readjusted, and the next game saw a full-strength team turnout.
The most recent squad change was Hills, who were acquired by a competitor and could no longer serve e2e customers. Within 6 weeks of our becoming aware of the purchase Hills left, the hole was plugged with existing talent from the bench, and unlike Wales, there was no drop off in form. Team e2e continued to exceed Service Level Agreements and agreed KPIs because, like Ireland in the Six Nations, the positions occupied by our departing members were reset, and the game plan unaffected.
In the dynamic 21st-century business world, strength in depth is increasingly rare as claims suppliers are consolidated into large single entities, greatly increasing the risk profile of their work with insurers. At e2e, our risk management rules cap our maximum exposure to one team member at any time. We also have a bench of reserves waiting to prove themselves. Further assurance comes from our scouting for the stars of the future and new stadiums in which to play.
Less thoughtful commentators and observers of the game suggest that changes to membership within a team, or indeed a network model, predicates instability. The reality is, the very essence and strength of a network model is its flexibility and agility; which is why there are so many examples of networks. It’s a model that works! Ask the Irish rugby team!
e2e’s UK network of salvage and vehicle recycling agents is unique. Only e2e has a business model that insulates the insurer from dependency upon one supplier, with the increased risk of supply interruption should the supplier’s operations be disrupted for any reason. The team approach, spreading demand across multiple suppliers and assets, reduces risk and provides the flexibility and capacity to cope with unexpected events. Insurance is all about coping with unexpected events, as recently and pointedly highlighted by our “referee”, the FCA, who are articulating their thoughts in their Building Operational Resilience work. Insurers could build the teams themselves, but this comes at a cost. Time and resource are needed to onboard and manage multiple suppliers, information sharing is more complicated, integration with multiple systems is more complex, economies of scale are reduced, and quality control and consistency become more challenging. Step forward, team e2e.
Claims inflation is driving huge interest in reclaimed parts, and e2e is equally excelling in this arena. Several of our members have made multi-million-pound investments in the extraction, cataloguing, storage and timely dispatching of reclaimed OEM parts. e2e’s clients benefit from a combined investment that is diversified, distributed across the UK and would be unavailable from one single company. The result is a huge inventory of quality-graded, warranty-assured and provenance-validated parts, available for delivery in 48 hours.
We are confident in the sustainability of our proposition and of the consistent service excellence delivered by our network. We look forward to helping insurers to mitigate service continuity risks, protect their bottom line and offer a fresh customer experience for many years to come.
Unfortunately, I’m less confident about Welsh Rugby.
