Derek McMullan, head of motor supply at Zurich Financial Services, says: “We have conducted a review of our Approved Repairer Network in two regions – North-west and Midlands/M5 corridor – and have decided to place increased business with two key repairers, Gemini and Howard Basford.
We have informed 17 repairers that we intend to discontinue our relationship with them. This is a first step: we will be reviewing each region in turn throughout the year.”
Repairers have been given 90 days’ notice, although McMullan says this will be extended if the bodyshop is heavily dependent on Zurich for work.
“We aim where possible to transfer work from affected repairers by the removal of postcodes on a phased basis,” he adds.
Zurich operates a labour-only scheme where the bodyshop charges for parts and paint at cost, with their labour rate enhanced by more than £10 an hour. That incentivises them to repair more vehicles than replace parts. “It’s a good move provided the contracts are inflation-proofed,” says industry consultant Robert Hadfield. “But I suspect they may try to introduce new bodyshops at a lower rate and they could start drifting back towards the £23-an-hour level.”
Shaun O’Reilly, of lobby group BRIC, called on Zurich to meet the cost of estimating systems and courtesy cars acquired specifically to service its contract.