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Blog: Getting ready for the B-word

Brexit balls

As the ins and outs of the UK leaving the European Union continue to be debated, James Roberts, business development director for insurance at Europcar Mobility Group UK, feels that - whatever the outcome - the pain for customers facing lengthy and expensive repair bills could be felt within hours.

James Roberts Europcar
James Roberts, business development director for insurance at Europcar Mobility Group UK

Deal or no deal? Either way, extended repair cycle times, parts delays and rises in repair costs are definitely not ‘humbug’.

As the negotiations conclude in Brussels, any ‘just in time’ solution is unlikely to be quick enough to effect the border delays and import tariffs that Brexit – deal or no deal – will bring to accident repair companies. So, as the average repair cycle time and cost looks set to increase along with the knock-on rise in average length of rental – accident repairers, car rental companies and insurers must work together to mitigate potential loss of revenue and customer loyalty.

Already on the environmental agenda for their obvious energy saving credentials, green car parts might form part of the solution. These undamaged and reusable parts of end-of-life and written-off vehicles are routinely reclaimed during the dismantling and recycling process. There is already an extensive market for affordable green parts for every car brand in the UK. Border delays are likely to severely disrupt the ‘just in time’ parts supply model adopted by the majority of accident repairers. So with rigorous testing and warranties already demanded of green parts providers, right now seems an opportune moment to start using them more. 

Ultimately though, even if accident repairers have already done their supply chain homework in advance of 1 November, being cut adrift from our major trading partner overnight is likely to mean repair cycle times rise. The impact of Brexit, will be felt not in months or weeks, but hours. Lengthy waits for repair may well lead insurance assessors to write-off a vehicle, leaving their customers without a car while they find a new one. Alternatively they play the waiting game for the repair and the average rental times increase. 

To avoid being stuck between a rock and a hard place it’s vital that insurers not only talk to their primary rental supplier, but ensure they have back-up support too. It’s not just car parts that will take longer to arrive on our shores, new vehicles are likely to be in short supply too. Developing strategic partnerships with rental companies that can provide effective and affordable three-month plus car rentals is an astute move. 

This is an important issue because some insurers may need to look at three-month plus car hire options for policyholders in the event their vehicle is written off and they have to wait for a new one to arrive.

In the end, if accident repairers can’t get parts they can’t repair cars, their cash flow is disrupted and they risk going out of business. Harsh but true. 

The knock-on effect on the insurance industry paints a bleak picture of long waits and increased premiums. No matter how Brexit pans out, everyone in the repair cycle needs to support each other in finding a workable solution, to keep our industries not only afloat, but riding the crest of the wave as we broach the troubled waters ahead.

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