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RSA latest with labour-only pilot scheme

Royal & SunAlliance has become the latest insurer to pilot a labour-only scheme, prompting the Vehicle Builders and Repairers Association to warn its members to approach contract terms with care.

The VBRA says its ‘What-If’ calculator will help repairers answer many of the financial questions under labour-only payments, which do not offer a separate rate for parts and paint.

Analyst Robert Hadfield, of Auto Body Projects, questions whether the pilot will turn into a full-blown programme. He believes the scheme is less about a national roll-out to 200-plus bodyshops, and more about RSA putting down “regional markers” to protect capacity in key locations, working with selected, high-profile repairers.

“Of course, if the results are right for the insurer the scheme may be rolled out further. But there are so many market dynamics currently at work that RSA will not want box itself too far into a corner,” says Hadfield.

“What this and the Zurich scheme provides is regional control for the insurer, preferential work levels and decent margins for the chosen repairers in the slack summer period and an ability to shed unviable contracts for the winter ahead – plus the ability to roll the concept out broader and deeper in their appointed regional geographic areas, if required. Offered that proposition, what repairer would turn it down?”

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