"Raising business efficiency and customer services standards in automotive claims: an Eastern Europe example" Focus countries: Romania, Poland, Russia

"Raising business efficiency and customer services standards in automotive claims: an

Eastern Europe example"

Focus countries: Romania, Poland, Russia

Dr. Richard J. Nathschlaeger

Tashkent, April 15, 2011

Audatex | ABZ | AUTOonline | Hollander | HPI | Informex | Inpart | Market Scan | Sidexa

Solera – a Global Company with a strong focus on Central & Eastern Europe


Solera – the only global provider of claims management solutions

Leading global provider of estimating software and services to the automobile insurance claims processing industry- US$558 million in revenue in FYE 30/6/09- 63% of revenue generated in EMEA; 37% in the Americas

Number 1 or 2 position in every market we serve

Our clients have included each of the 10 largest European and North American auto insurers

Founded in 1966, with a presence in 53 countries and approximately 2,200 full-time employees

Over 72,000 customers including:- 1,500 automobile insurance carriers- 36,000 collision repair facilities- 7,000 independent assessors- 29,000 automotive recyclers and dealers


The World of Solera

AUTOonline’s business model complement well Solera’s operations in 53 countries across 6 continents

Solera Countries


Central and Eastern Europe (CEE) in the Solera World

Audatex GAS

SAN DIEGO, CA

Audatex CEEAudatex North-America

VIENNA, AUSTRIAMINDEN, GERMANY

Solera

SAN DIEGO, CA

Audatex UISA

READING, UK

ABZ

ZEIST, NETHERLANDS

AX Ibero - America

SAO PAOLO, BR

Audatex BEFIG

BRUSSELS, BELGIUM TOKYO, JAPAN

Audatex-APACAX Ibero-America


“If you can find a path with no obstacles, it probably doesn’t lead

anywhere.”

- Frank A. Clark


Countries in CEE


Audatex – CEE in 2011

AT- 1969

PL-1997

HU-1994

SK-2004 BY

RU-2003

CZ-1994

RO-2005 EE

LV RS

SlHR

BA

MDTR-2008

UA-2004

LT-2009


Market Development

Audatex in Central and Eastern Europe

Voice of our customer

• Big 5 insurers go CEE

• Allianz, AXA, Generali, Uniqa, VIG

• Manufacturers go CEE

• VW, Dacia-Renault, Kia, Hyundai, Peugeot

• High economic growth region

• Demand for electronic workflow partner

• Customers have quality expectations

Audatex CEE Objectives

• Meet and exceed customer

expectations

• Respond to dynamic market

developments

• Expedite global knowledge, local

focus

AX-CEE: Facts & Figures

• HQ in Vienna

• 100 employees in the region

• Regional product development

capabilities

Opportunity: Action:


Market facts - Romania

• Population: 21 mill.

• GDP/capita: € 5.510

• Car park: ~ 5 mill.

• Insurance related claims: 0.85 mill

• % of insured vehicles: 85 %


Market dynamics - Romania

• The repair market is dominated by Dacia – Renault repair facilities as a result of their dominance in the car parc

• In the field of motor claims the insurers play a dominant role which was strengthened even more during the last couple of years of economic crisis

• Insurers enforce labour rates and parts price conditions through contracts

• However, steering is still in initial phases and true approved repairer networks are just starting to be developed

• The introduction of a standard estimating tool increased the transparency


Example Audatex – a true benefit for the Romanian Market

• In 2006 the market started accepting electronic estimating systems with:• Importer / manufacturer recommended part prices• Labour times based on manufacturer guidelines• Manufacturer based painting

• Today, 9 out of the TOP 10 insurers require/accept a standardised Audatex estimate from the repairers based on manufacturer information in order to approve a repair

• Repair costs were thus reduced by 15%-20 %

• In return insurers guarantee jobs to repairers using Audatex – some shops could increase their insurance driven business by up to 50 %

• Now both sides go for further process automation in the motor claims business to reduce process waste and waiting times


Market facts - Poland



• Car park: 17,8 mill.

• Insurance related claims: 1,9 mill



Market dynamics - Poland

• Approximately 2,500 repair facilities service about 80% of the repairable motor claims volume

•The top 5 insurers control more than 70% of the motor insurance business

• Insurers rely on the dealers for policy sales for new cars

• Price war on the policy side forced insurers to focus on the process and severity control and thus look for closer ties with the repairers

• In the last 2-4 years concrete steps towards steering and building of approved repairer networks can be observed


Market standards – Poland

• Electronic repair estimating systems provided by Audatex and Eurotax have been a standard in Poland for more than 10 years

• OEM parts prices are provided by the importers and are a standard for the country

• The average repair estimate has been relatively stable except for a dip of about 10% in 2008 and the first half of 2009 but recovered to the level of about 5,100 PLN.

There are standards which contribute to efficiency and customer satisfaction


Market facts - Russia



• Car park: 34 mill.

• Insurance related claims: 7,5 mill



The financial crisis of 2008/9 brought a shift in the market dynamics

Motor claims repairs came into the focus of everyone

The Repairers

• Repairs became a major source of revenue

• Repair waiting times decreased to 3-6 weeks

• Established closer relations with the insurers

• Began using mutually accepted independent estimating tools to establish a “common language”

• Focused on automating the workflow to get faster approvals and reduce waiting times


The financial crisis of 2008/9 brought a shift in the market dynamics

The Insurers

• Drive to establish a “common language” with the repairers based on market realities

• Part prices• Repair times and methodology• Painting

• This allows for shift of repairs to independent shops and reduction of the number of disagreements

• Centralization of claims processing standardizes the process and reduces the probability of fraud

• Automation of the workflow with the repairers based on structured data instead of physical or electronic “paper” is expected to bring major enhancements to customer service and process efficiency


Market trends towards increasing efficiency and customer satisfaction – Russia

We observe several trends

• Majority of insurers are transitioning to official electronic repair cost estimating tools

• Interest is growing towards importer recommended part prices

• Manufacturer labour times are getting broad acceptance

• Work is going on to determine acceptable painting methodology

• Importers and insurers are strengthening relationships in the claims area

• Preferred repair networks and steering are emerging

• There is a realized need for process automation based on structured data rather than shuffling paper (be it physical or electronic)


Summary and Outlook


Drive to increase efficency and customer satisfaction

CEE is behind Western countries in terms of clear standards. Major steps to be taken are:

• Adoption of a standard estimating tool• Management of labour times, local part prices and

painting standards• Development of approved repairer networks and

introduction of steering• Automation of the repair process between Work Providers

and Repairers


Audatex will continue to invest in Eastern Europe & CIS

How is Audatex contributing to this improvement ?

• Audatex has established teams in each country• Our teams focus on process optimisation for each client• We provide expertise to all countries in the region

• We are excited by the opportunity to share our global knowledge to assist in the transition to higher standards and increased customer satisfaction in Uzbekistan


“Fortune favours the bold.”

- Virgil


Solera – global knowledge, local focus

Thank you

Documents

"Raising business efficiency and customer services standards in automotive claims: an Eastern Europe example" Focus countries: Romania, Poland, Russia