Premium Repairer Network Goes Platinum

As NTI’s Premium Repairer Network celebrates its 20^th anniversary, we talk to the key players behind a bold concept that has transformed the heavy vehicle repair industry.

Some twenty-one years ago, a group of NTI leaders cooked up an ambitious plan to transform the heavy vehicle smash repair industry.

At the time, the industry largely comprised small, family-owned shops, many of which had yet to embrace modern business practices, equipment and technologies.

What’s more, the relationship between insurer and repairers was characterised by a lack of trust and transparency.

For customers the result was a “very complex, slow” claims process and poor quality repairs, with around 28% of jobs sent back for rework.

“A lot of work was being done in [car] repair shops to increase training and productivity. But I didn’t see the same in the truck repair industry,” recalls current CEO Tony Clark, who joined NTI’s claims department in the early 2000’s from motoring group RACV.

The potential for change was further highlighted when Clark attended the IAA truck show in Hannover and saw first-hand the latest workshop equipment being used in Europe.

At the time, most local repair shops weren’t using the latest kit common overseas, including chassis aligning equipment and overhead cranes.

“The first repair shop I visited [when I returned to Australia] had equipment, but it had been sitting in a box for two years,” Clark remembers.

Led by then CEO Wayne Patterson, NTI determined the industry was ripe for change.

“We wanted consistency so our customer could go into any repair shop in Australia and get a quality repair, in a reasonable time frame whilst controlling the repair cost,” says NTI’s National Development Manager – Transport, Craig Carmody, who joined the insurer in 2002 as Claims Services Manager.

Building relationships

In 2001 NTI formed a project team to develop the concept of a Premium Repairer network.

As a first step, it invited the owners and managers of around 30 of the top truck repair workshops in Australia to a conference to discuss the future of the repair industry.

“We did a whole lot of consulting with them and proactively collaborated with the repairers to drive that change in behaviour and structure. It was really important to gain their trust,” Carmody says.

NTI’s General Manager – Direct, Alan Hasted, who joined the insurer in 1994, says initial discussions centred on how repairers could do claims quicker, cheaper and with less rework.

“It was the genius of the ‘and’ – with less rework you lower the costs, improve the quality and get repairs done faster,” says the former General Manager of Claims Operations.

“So, if we could improve the quality of repairs, and if we could increase the timeliness of repairs, that would help everyone, including the customer, the repairer and us.”

NTI proposed a scenario to repairers: If their workshops burnt to the ground and they had an unlimited budget to rebuild, what equipment would they include in their new workshop?

“Before we could change the behaviours of repairers we had to change the structure of the repair network. And to do that we had to introduce standards into the repair network,” Carmody says.

“So, we asked repairers if you had to build a workshop today, what would you put in it? The repairers said that to fix trucks they needed a spray booth, they needed an overhead crane, they needed the best people.

“A Premium Repairer equalled the best people supported by modern equipment, in the best facilities underpinned by technology and business processes.”

Quality, time, cost

In consultation with repairers, NTI developed a set of standards for the nascent Premium Repairer network focused on three key factors: quality, time and cost.

Carmody says everything was looked at with a “customer lens on it” – and the ultimate goal of “getting trucks back on the road in the right time and to the right quality standard”.

“A mission statement was developed, ‘As an NTI Premium Repairer our mission is to provide quality repairs, on time, that meet or exceed customer expectations, and are supported by a lifetime guarantee,” he says.

The standards started with minimum equipment requirements, including overhead cranes, panel stands, parts washing machines, spray booths and more.

“There were a lot of inefficiencies and safety issues, for instance operating paint booths out in the open,” Clark recalls.

“It was established that with minimum standards it will improve safety, productivity and speed to get the truck back on the road.”

In an endeavour to improve repair timeliness NTI re-engineered the authorisation process and allowed Premium Repairers the authority to commence work prior to a formal assessment.

“We’re talking $150,000 repairs, and most insurers are scared by that, but this is what we do and if we have the right processes in place, we’re already paying 99% of claims, so we said just get in and get started, pull the truck apart and start work,” Hasted says.

“Otherwise, they’re waiting two weeks for approval from a Repair Manager. And we guarantee we’ll still pay them for the work completed, even if the claim was in the 1%.”

With a policy of always using genuine parts, NTI has built and maintained strong relationships with original equipment manufacturers (OEM’s) to ensure parts pricing and availability.

“We focused on the accident scene, and steered the truck to a Premium Repairer, and that Premium Repairer had the authority to start work straight away and initiate the parts process straight away. 

“With the strong OEM relationships, we could secure the parts immediately and in the event they weren’t available, fast track the supply or on occasions remove them from a new vehicle in the yard,” Carmody explains.

“And the NTI team had industry trained people with trade backgrounds that the repairers could trust to make informed decisions. 

“Accountability and transparency in the parts supply chain was crucial. It was all about the timeliness of the repair. It’s like a Swiss watch, everything needs to work together.”

In return, NTI also made significant changes to how – and when – it paid repairers.

“The industry standard was that insurers pay funny money at funny times. There was a lot of discussions around that,” says Hasted, noting that back then NTI paid repairers set rates based on a time manual, regardless of how long they took.

“So, we said ‘okay, let’s talk about real money, real time – that is, if a job takes one hour, we’ll pay for one hour’,” he says.

“But first we need to know how much it costs to run your workshop per hour. This required a high degree of trust for them to share their financials and we then built a model that included all the variants including their location, staff numbers and type, etc, building the first heavy vehicle industry benchmarking.

“And we made it clear that profit was not a dirty word – we recognised that they deserved to make a profit

“We also said that we would pay within 48 hours of submitting an invoice versus six-eight weeks for most insurers. We recognised that they’re paying for parts, electricity, staff etc and carrying that debt for up to two months. And they could have 10 jobs like that on at any one stage.”

In return, Clark says NTI expected “uncompromising quality in repairs, to be kept informed, and preparedness by repairers to invest in their business into the future”.

From Little Things…

It took more than 12 months for the first repairer – Western Australia-based Parins – to meet the Premium Repairer network standards in August 2004.

A further three repairers hit the mark in December of that year: Royans in Brisbane and Truckworks and All Transport Crash Repairs (now Wales Heavy Vehicle Repair Centre Adelaide) in South Australia.

“We got to around 12 Premium Repairers over the next couple of years and then we got them all together to look at what was working best,” Hasted says.

“We came up with the concept of the Premium Repairer Council which would review standards and continue to move the bar higher.”

Today, NTI has 25 Premium Repairers across the country, including national group Royans, Wales Truck Repairs in NSW and SA, Parins and City Panelbeaters Truck Repairs in WA, Habib Bros Truck & Car Smash Repairs, Workhorse Collision Repairs and National Truck Repairs Newcastle in NSW, Modern Truck and Trailer Repairs, Western Truck Repairs and Truckrite in Victoria, Arrow Transport Repairs and Re-Car in Queensland, and Truckworks in SA.

The relationships between NTI and Premium Repairer have now progressed to the point where NTI runs workshops on broader business issues such as business succession, marketing, training and recruitment, etc.

“We went from having arguments about costs to how can we help you improve your business,” Clark says.

The Benefits

Hasted says the improvements in repair times, costs and quality have been significant.

Rework dropped from around 28% to just 3% today; while repair times have declined to the point where they are nine days quicker than the competition. Not surprisingly, customer satisfaction has leapt.

NTI had the confidence to offer a life-time guarantee on all work – something unheard of in the industry.

“Now that we were paying real money/real time, rework reduced and timeliness improved by a week, and we also saw average repair costs go down, so it became cheaper for us to repair,” Hasted says.

“Even though we were paying double the hourly rate, repair costs did not dramatically change in the first few years plus customer satisfaction went up. We were running at 99% of customers who would recommend NTI to a friend.”

Most importantly, says Clark, “customers were getting their trucks back on the road quicker with repairs guaranteed for life”.

For repairers, the business benefits have also been huge.

Royans’ Regional Manager Barry Blomeley, who was an estimator and later branch manager around the time, says the Premium Repairer network took the industry to the “next level”.

“It made it a more professional network,” he says, citing introduction of the “real time, real money” concept, 48-hour invoice payment terms, and instant repair authorisation as critical to providing repairers with consistent cash flow to justify investment in their businesses.

“Previously it was funny time, funny money. With real time, real money if you quoted 100 hours, and did the job in 80, you charged 80; or if you quoted 100, and it took 110, you charged 110,” he says.

“You knew you were going to earn a margin at the end of the job, it was much more consistent.

“Instant repair authorisation was another really big thing. If you knew they were insured with NTI, and it wasn’t a total loss, you were pre-approved and so you could start work straight away. It was a big time saving [in repair time], often cutting a couple of weeks out of the process.”

What’s more, Blomeley believes the streamlined process – from approvals and sourcing of parts through to fast payment of “real money for real time” – has been crucial to the dramatic reduction in rework.

“You’re no longer panicking at the last moment and rushing to get jobs done. It’s just a much more consistent approach,” he says.

The Future

While the NTI Premium Repair network initially focused on heavy vehicles, NTI has since expanded its Repairer strategy to include some 40 NTI Local Repairers, specialising in light-duty vehicle repairs closer to customers’ bases. In addition, a Light Vehicle Repairer arm was launched in partnership with AMA.

More recently, NTI Trailer Repairers have been added to the mix, with around 33 repairers ranging from existing Premium Repairer Network members such as Wales, Parins, Recar and Royans, through to dedicated trailer repairers including Vawdrey, Maxitrans Sydney and GLT Brisbane.

While the Premium Repairer network is recognised as the “best of the best”, Carmody says NTI is focused on continuing to expand services and drive standards higher.

“We have changed the standards over time. Customers now have a place they come into and have a coffee. Some even have handover bays. It was always about the customer experience,” he says.

Hasted agrees the challenge is how to keep raising the bar. “How do we keep improving the Premium Repairer network as this is what the customer expects. They tell us where we are falling down, where technology is changing.

“The big, easy stuff is done. And it was relatively easy as the industry was so fragmented and all over the place.

“Now you’ve got two big [repair networks] and generational change going on in the independent shops.

“Plus, technology is changing with trucks so the sorts of accidents will change. But what can’t change is the overall philosophy of continuing to engage with industry and continuing to improve.”

In this regard, it seems fitting that the Premium Repairer network’s inaugural member, Parins, is now trialling the introduction of the latest big improvement – “straight-through repairs”.

Aimed at addressing the post-COVID slowdown in the parts supply chain, this latest initiative enables the repairer to start work on a job – and, critically, order parts – without the need for any authorisation.

Parins WA Centre Manager Sandy Jarman – who joined the business 13 years ago as a panel beater – says the initiative is another great example of why he “loves working with NTI”.

“They’re continually trying to lower the cycle, the repair times. And this latest initiative is going well – it’s definitely sped up the parts ordering process,” he says.