Driven Brands expects 1,000+ DRPs, says shops well-positioned if insurers trim networks
Driven Brands recently known as the company’s national franchise brands well-positioned amid what he called some insurance company need to pare down networks of affiliated auto body shops.
“We happen to know many carriers at this time are looking at their markets and looking to reduce their DRP counts,” Driven Brands insurance Senior V . p . Arlo Johnson told a virtual Driven Brands conference on Dec. 9, 2021. However, collision repair brands offering corporately managed programs “are not the ones they’re taking a look at,” he explained.
Insurers would first cut independents — “definitely underperforming independents,” he said. They will send volume to “high-performing, self-managed networks … while they remove independents and low performers using their networks,” he explained.
Johnson estimated that Driven Brands would end 2021 having established the equivalent of a lot more than 1,000 direct repair program agreements across its CARSTAR, Fix Auto USA and ABRA networks of franchisee shops.
“70 % of these DRPs are with top 10 carriers,” Johnson said. “And that we are all aware that’s where the volume is.”
Johnson said his team is centered on adding DRPs and evaluated based upon that metric. He said Driven Brands seemed to be focused upon adding shops to the corporately managed programs that already count many of the company’s shops.
He said participation in corporately managed programs aids Driven Brands in obtaining “deeper DRP penetration” over time, he explained.
Simpler for insurers
Under a traditional direct repair program, some insurance company would have to work with with hundreds of independent shops, based on Johnson. A corporately managed program allows the carrier to do business with numerous shops but deal with only a anchorman of contact at an MSO. The insurer may also perform single contract great for countless Driven Brands locations at once, he explained.
“It simply constitutes a much more sense for them” to work with MSOs, Johnson said of insurers.
Corporately managed programs also reduce the quantity of shop-level oversight required by an insurer, which creates an opportunity for Driven Brands by “shifting the responsibility” to shops, according to Johnson.
However, means local shop-insurer relationships “in many cases are negated,” he explained, recalling conversations with franchisees who wondered why they can’t interact with their usual local insurer representative any more.
But a growing number of insurers seek corporate-level assistance from Driven Brands therefore the carriers can “remove the local adjusters out of the equation,” Johnson said. The insurers prefer to redeploy those resources elsewhere within their businesses, he explained.
Driven Brands was heavily engaged in “problem resolution” at a corporate level, based on Johnson. He known as the company’s “sent to review” oversight program an important element and described it as driving “estimate accuracy” and “DRP compliance.” This elevated Driven Brands within the eyes of insurers, he said.
The conglomerate also regularly engages in performance meetings with insurers and shop performance, shop growth and supporting the carriers, he explained.
Performance and KPIs
Driven Brands also offers the “right to self-cure,” Johnson said. His company knows when its shops aren’t performing in the correct level and it has the opportunity to fix them internally “before they lose the company,” he explained.
Corporately managed programs present an incentive for shops to deliver results in the threshold the insurer demands.
Driven Brands continues to offer “guaranteed performance” through performance-based and large network agreements, Johnson said. Once the company performs well on insurer metrics, it may reduce and sometimes eliminate the discount it provides the carrier, he explained.
“We have performed very well” over the past many years, competing on KPIs at or over the level of other national MSOs, according to Johnson. “That keeps us hanging around,” he said.
Johnson also predicted insurers would improve their usage of performance scorecards as a means of allocating referrals. “A minimum of five from the Top ten carriers” uses or already use CCC Scorecard for this function, he said.