Technology and TPAs: The Best Defense is a Good Offense

Recently, it was announced that there is an effort in place to introduce the concept of the development and implementation of technical standards to address the insurance claims process, thereby leveling the playing field. As noted in those same announcements, technical standards would support independently owned glass shops in their ability to launch an offensive against the blatant, anti-competitive tactics used by insurers and their third-party administrator (TPA) partners. TPAs are getting bolder and bolder in their determination to capture market share, steer work to preferred providers and contain costs. The recent announcement by USAA Insurance that it may require inspections using technicians, employed by the competition, and following the lead of GEICO Insurance, was the catalyst for this development. Thank you, USAA. Using the latest in technology, the industry will unite to stop this brazenness. Enough is definitely enough.

When I began my career in the auto glass repair and replacement industry, I could not believe that any third party, insurer or otherwise, could dictate the terms of what a business should charge for its services. To me, it should never matter who is paying the bill. I viewed this as no different than if a credit card company would have any control over what a business charged, because a customer was using credit as a means of payment. As the years passed, I watched in amazement as insurers, through their TPAs, assumed expanded dictatorial powers regarding the terms of doing business, including the parts that shops were to install (that is, if you were fortunate enough to retain your customer in the process). And, as evidenced by the introduction of inspections, performed by the competition, and under the mask of fraud prevention, they continue to attempt to expand those powers. It is time for independents to take a stand—and we will!

I maintain that any business should be able to charge as it sees fit, because market forces will eventually determine its fate. Any significant variance on pricing in a free market, whether higher or lower, will be the determining factor in whether a business is successful or not. Am I suggesting that shops should charge insurance companies significantly more than the price they charge customers paying cash? Absolutely not. But the desire of insurers to contain costs does not justify the antics that are being experienced in the AGRR industry today.

I believe that independents have been remiss in their failure to address the ongoing interference in their ability to conduct their businesses. But, as they say, it is never too late and the introduction of technical standards will present an opportunity to address the interference that insurers and their partners instill on independent businesses as they attempt to further control the market. The technology is available and independents will be far better off if they embrace these efforts. In my opinion, the expanded use of technology in the claims process can eliminate the need for TPAs altogether, making them a page in the history books. And I believe that by presenting insurance companies with the option, TPAs may just sail off into the sunset.