Allstate Plans to Leverage Sterling Ownership
Tempe, AZ. 06/11/2001 - It comes in handy to have broken into the insurance claims field with Allstate Insurance Company some 35 years ago. Friendships were then struck which have developed into inside contacts at some of the highest levels of Allstate today. Utilizing these contacts, we have been trying to define just how Allstate's purchase of Sterling's chain of 39 body shops will affect consumers and those shops that seek to serve them.
. . . Current Pro Shops have a Problem !
Word Track . . . Old / New
OLD: From its outset, Allstate's Call Center had a mission to "Steer" consumers to those collision repair facilities with whom Allstate had favorable relationships. The steering euphemism of "Pro Shop" was born. Up until about three years ago, the Call Center representative would say, in effect . . "Here's five shops close to where you live and/or work, Pick One!"
NEW: The word track has now changed to proposing one shop at a time (based upon a descending order of Allstate's preferences) and the sales pitch continues until the vehicle owner eventually agrees upon a shop. The sales pitch includes an explanation of Allstate's repair guarantee, nationwide service, potential problems with non-Pro Shops "and all that other crap" (a direct quote from our contact).
When an insured or claimant reports their auto damage claim to Allstate's Call Center, the rep on the phone will ask . . . "Do you have a place where you want to have it repaired?" The caller would respond with either a Yes or No. If the caller says No, the word track would be . . . "Then let me explain our Pro Shop Program to you." If the caller says Yes the word track would be . . . "Ok, but let me take a moment to explain our Pro Shop Program to you." It makes no difference what preference the caller expresses, they get the sales pitch.
Enter Sterling . . .
Now that Sterling is owned by Allstate, Sterling is Always First on Allstate's list of Pro Shops and an extra effort is made to "Sell" Sterling to Consumers.
Sterling vs non-Sterling Pro Shops . . .
According to our contact, Allstate evaluates their repair facilities based upon a standard referred to as "Process Compliance". This standard sets goals for Aftermarket Parts usage, Salvage Parts usage and a ratio of damaged part repair rather than replacement. In short, "Process Compliance" grades repair shops on how well they do what they are told by Allstate.
Interestingly enough, individual Sterling shops will not be expected to meet these "Process Compliance" repair standards. Allstate will simply be tracking Sterling's bottom line repair cost and comparing it to the bottom line repair costs of non-Sterling Pro Shops. In the meantime, Allstate has already begun to tighten the "Process Compliance" standards for non-Sterling Pro Shops. Failure to comply with new tighter controls will move those shops down the list being "Sold" by Call Center reps.
Allstate is fostering a competition between Sterling and non-Sterling Pro Shops to identify and weed out the less obedient shops.
Allstate fully expects to loose a significant percentage of their existing non-Sterling Pro Shops. In fact, the category of repair shops they expect to loose first are the dealership shops. As a group, they generally have a much lower "Process Compliance" rating.
By taking this action, Allstate expects they will be left with a nucleus of shops with a high "Process Compliance" rating. As this unfolds, Allstate will be identifying geographical areas where Sterling will be buying / building more collision repair facilities. The net result, Allstate will have a hard-core network of collision repair facilities over which they will have Absolute Control !
Pro-Consumer Shops, increase the Punishment . . .
Pro-Consumer Collision Repair Facilities can expect Allstate will be re-doubling their efforts at Steering consumers away. These shops will have to re-double their Consumer Awareness efforts and may even have to Encourage Consumer Involvement to resist the fraud and abuse that is coming their way.
Recommendation . . .
The more we learn about Allstate and their plans to utilize Sterling, the more we become concerned about Consumers having to deal with Allstate. We recommend Allstate insureds begin shopping for replacement insurance immediately. It may not even be wise to wait until renewal time to change insurance companies.
The Insurance Consumer Advocate Network is an InterNet based consumer advocacy effort designed to Increase Consumer Awareness as to Insurance Related Issues, Encourage Consumer Involvement with Insurance Related Efforts and Facilitate Consumer Contact with Pro-Consumer Entities.
The InterNet web site for the Insurance Consumer Advocate Network is www.iCan2000.com.