IAG Insurance’s NSW subsidiary, NRMA,
won’t be dumping its controversial Web-based Repair Management (WRM) system
without a fight according to a key figure in the campaign against it. WRM has been widely criticised by panel
shop operators, consumers and now the state’s fair trading minister.

A scathing NSW Government-commissioned
independent report has put further pressure on vehicle insurer NRMA to cut its
losses and scrap WRM. But Bill
Pickering from Flagship Communications, which advised the NSW Motor Traders’
Association (MTA)
in its battle to convince NRMA to dump
the system, said the battle wasn’t over.

“Even with an independent report which condemns the
web-based smash repair quoting system, IAG will not easily abandon this
system,” he told Crikey. “I
suspect that some form of anti-steering legislation will still need to be
introduced by the NSW Government.”

But he
said the campaign’s communications and government
relations components and hard work had shown “that David can beat Goliath.”

Under
WRM, repairers tender for insurance jobs based on website photographs and
descriptions of damaged vehicles. NRMA then directs the work to the successful
tenderer.

The NSW
Motor Traders’ Association (MTA)
claims the system forces repairers to cut corners and submit the lowest quote,
penalises repairers for finding extra damage and raises serious safety issues.

IAG’s
subsidiary NRMA Insurance claims the system will result in lower premiums, a
more competitive repair industry and a better deal for consumers.

The
independent report released last Thursday claimed inadequacies and deficiencies
in WRM including a failure to accurately determine the severity of damage and
the correct method of repair.

After
three days of battering earlier this month by the Parliamentary Stay-Safe
Committee, shareholders took flight with IAG’s share price dipping below the $5
mark to a 16-month low two Fridays ago but has since climbed to sit around the
$5.30 mark. But it’s
down from $6.23 just six months ago before their new web-based system was
introduced.

Now NSW
Fair Trading Minister, Diane Beamer, has called on NRMA and IAG to reassess the
use and effectiveness of WRM.

“The
report says that while 80% of repairers are not happy with IAG’s system,
they are trying to make it work to stay in business. That position is
understandable when the insurer controls more than half the smash repair
market,” Ms Beamer said.

Many in
the trade believe that on top of the suffocation of government regulatory
paperwork requirements, the pressure put on panel shop owners by the system is
putting them out of business and taking a devastating toll on families.

“I’ve
heard of blokes going out of business and things becoming so difficult that
they’re struggling to put food on the table for their families,” a northern
beaches Sydney panelbeater told Crikey. The
panelbeater spoke on condition of anonymity, fearing that the insurer would
otherwise target him or deprive him of a significant amount of work that was
crucial for him to survive in business.

The government’s independent report
was compiled by Gary Thomas, a leading expert in smash and panel repair at St
George TAFE college. He visited 30 auto body repair workshops servicing seven IAG
Care and Repair Centres. Thomas also visited one IAG Care and Repair Centre in
Rosebery.