Following a series of hastily called meetings it emerged that the insurer may be looking to reduce its network from 370 to 200 this year. Sources close to the main negotiators said the decision was due to a miscalculation by Zurich of the amount of work it had to offer.
Rather than the projected 400,000 repairs, the company processed 140,000 claims.
The Zurich deal, announced by the MVRA last July as a three-year contract, was reliant on MVRA QA membership as well as costly investment in equipment such as a Motex estimating system.
The industry source said that if Zurich did begin terminating repairers it meant the three-year approval contract was worthless. He questioned whether repairers would sign a new agreement given Zurich's lack of commitment.
Charles Long, network manager for Zurich Insurance, denied that any decisions had been made. He claimed the company was simply conducting an annual review of its contract. “The contract states that it is subject to an annual review and that is what we are doing,” he said. “We are consulting widely to ensure we have all the information to make the right decision, but we are way away from making that decision.”