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'Time is issue,not work rates' MFBI

Market Facts and Business Information claims insurers should concentrate on controlling time allowed per repair rather than clamping down on labour rates in its latest study of the European accident repair market.

Its analysis claims that low hourly labour rates are not the most effective means of controlling repair cost because bodyshops would try to maximise labour costs by other measures.

The costs of car accident repairs in Europe are set to rise by 17% over the next six years while the number of accident repairs will increase by only 3%.

However, MFBI predicts that bodyshop profitability will fall, with smaller outlets continuing to struggle. Average repair costs in the seven countries studied by MFBI grew by 19% between 1992 and 1998, though in the UK, where insurance companies direct a high proportion of repairs to insurer approved bodyshops, average repair costs have risen at a slower rate of 13%.

Replacement parts account for the highest proportion of average repair costs in Europe at 47%. The UK has one of the highest replacement parts costs as strict warranty and repair liability considerations mean bodyshops tend to replace rather than repair damaged panels and parts.

MFBI claims insurance companies will have to reduce the cost of replacement parts if they are to achieve greater control over accident repair costs.

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