IBIS China hits high note
- June 29, 2018
- Posted by: Alan Feldberg
- Category: IBIS News
More than 100 delegates attended IBIS China 2018 at the Sheraton Hotel, Zhu Hai, China on 21 June, when an expert line-up of speakers discussed a broad range of topics from insurance to environmentalism and technology.
Meanwhile, the afternoon was given over to an issue particularly relevant to the Chinese market, volatile organic compounds (VOCs), following the introduction of new regulations.
The conference, which comprised 10 insightful presentations, was again partnered by AkzoNobel, whose support was fundamental in making the day such a huge success.
Jason Moseley, IBIS CEO, said, ‘This is our fourth IBIS China and possibly our most successful to date. The topics covered were all incredibly relevant to the industry – both globally and within the region – and the feedback has been very positive. We’d really like to extend our thanks to AkzoNobel, without whom IBIS China 2018 would not have been the triumph it was, and we can’t wait to return again in 2019.’
After an introduction from Jason, Keith Malik, director, global accounts, AkzoNobel Coatings, began the day by providing a global overview of the collision repair market, before drilling down into the Chinese sector.
Despite future concerns from some within the sector, he said the prognosis wasn’t as bad as some feared with expectations that the fleet size would double to 500 million by 2027.
“Growth remains very significant, so it’s a positive outlook,” he said.
A substantial area of growth, he continued, would come in the SUV segment following the end to regulations surrounding single-children families in 2015 and 2016, while the middle income segment would also experience continued – and possibly accelerating – growth as a result of urbanisation, which is seeing more and more people move from the villages to the cities.
Keith also predicted that China would play a leading role in the EV sector going forward, thanks partly the development of smart cities. He said this provided China the opportunity to establish EV infrastructure from scratch in new areas.
‘EVs are here to stay and we all need to think how our future strategies will manage the growing segment,’ Keith said.
However, echoing a common refrain across the industry, regardless of the region, he warned that skills would be greatest challenge going forward.
Keith was followed on stage by Stefan Schrey, head of claims, AXA. He began by pointing to his wide-ranging experience in markets around the world, saying that the relationship between insurers and repairers was different in each with different levels of maturity from region to region.
However, he said that regardless of the different stages of the relationship, one common theme was that both parties won if the relationship was based on cooperation.
He explained that the customer sees the repairer and insurer as a single unit and does not differentiate between the two, pointing out that if either provided a poor service it would reflect badly on both.
‘A successful insurer-repairer relationship starts with communication,’ he said. ‘The purpose is to understand each other’s business. Only then can you create an ecosystem where all three parties – insurer, repairer and customer – can benefit.’
Stefan continued, ‘The whole thing is about making the client feel special. When they come to a repairer they should feel like they have a business class ticket, not economy.’
He went on to say that this can only be achieved if repairers are able to invest sufficiently in both training and new technology. He said that in many cases workshops are already behind the times but a successful repair ecosystem depends on them being able to restore damaged cars to their pre-accident condition safely and efficiently.
‘It’s our responsibility as insurers to ensure the profit margins for repairers enable them to invest in training and technology, because if they don’t there is no way they can survive,’ Stefan added.
‘You need to understand that we’re one unit. That will give you a competitive advantage, as your competitors will not be doing this.’
Next on stage, Kevin Jones partner and commercial director, Radtech, addressed the benefits of making the most of the latest technology available to introduce more environmentally-friendly and sustainable processes. He emphasised, though, that not only is this a greener approach but it can have a notable impact on efficiency and therefore improve profit.
He explained how, as managing director of Al Futtaim in the United Arab Emirates, he realised incredible efficiencies when he switched from solvent paints to waterborne products, adding that he made similar gains when adopting the latest, greener solutions in spraybooths and roller primers.
Kevin explained that he was by not an eco-warrior, and his decisions were all made with profitability in mind. He said, ‘I’m a businessman, like you, but by introducing the latest environmental products, we were saving money, lots of money, and making efficiencies at the same time.’
However, he did say that businesses would only thrive in the future if they acknowledged the change to working practices that environment issues are bringing, pointing out that, apart from anything else, changes to regulation would force them to adapt.
He said, ‘The environment is forcing us to use different systems, but by doing so you can make massive efficiency savings.’
Kevin pointed to the aviation and marine industries as examples where environmental measures had been turned into good business, highlighting that moving from a water-based wash system to a dry wash had reduced the number of cleans per plane per year from six to two. Furthermore, by using a dry wash system, engineers were able at the same time to carry out maintenance and servicing. That meant planes were in the air – and therefore earning the airline money – far more often.
‘It was a remarkable step forward. Similar things could work in the automotive sector. Legislation is already banning the use of water in many regions, but this doesn’t have to cost money. What I’d say is, ‘look at the best products and look at how you can improve your processes and improve the bottom line. Our industry is changing. But don’t be afraid of it. We need to evolve or we’ll get left behind.’
Larry Rong, COO CesviChina, then shone a light on the Chinese market specifically. He began by highlighting the size of the industry in the country, saying there were more than 385 million drivers (more than the entire US population).
He said that the repair industry in the country was worth an estimated $92bn, and with more new drivers taking to the roads meaning, potentially, more collisions, the future was secure.
However, with a cap on premiums, he warned of low profitability for insurers and said that squeezing costs was the only way to increase profit. To achieve that, he said that Cesvi has introduced AI assessments for smaller jobs, and reported increased speed by 4,000% and have a 99% success rate.
He wondered what the benefits would be when AI could assess greater damage while, at the same time, identifying the specific parts required.
The afternoon sessions focussed on VOCs in the industry, an issue of particular relevance to the Chinese market as a result of new regulation, with presentations from Louie Luo, research and development director VOC, AkzoNobel, Mr Yu, president of GuangLi VOC, and Eric Ng, SATA Voc.