Glas ass Pr Progra ram Redesig ign May & June 2019 For discussion only 1
Terms of Reference ce • From late May to the end of June, ICBC is hosting road shows throughout the province to engage with ICBC-accredited collision and glass shops on the proposed redesign of these programs. • This presentation is a condensed version of the road show presentation. • From November to May, ICBC consulted with the Industry Advisory Committees, for glass and for collision, on key program redesign concepts. • The mandate for the IAC was program design elements: labour rates were out of scope. • Although IAC and ICBC’s views differ on some aspects, the committee agrees the proposed program redesign is a significant improvement and aims to introduce incentives to drive savings and benefits for both industry and ICBC. • The IACs represent collision and glass shops throughout the province. • For more information about the work IAC has been contributing to, please see Announcements on the Collision redesign page of MD Business Partners at icbc.com For discussion only
Competitio ion Law ICBC, its employees, the association, the association staff, and the individual attendees (collectively the “Attendees”) give high priority to full compliance with both the letter and spirit of the federal Competition Act (the “Act”). During meetings and programs, the Attendees will not condone or permit any discussions, whether official or “unofficial” or “off the record”, of price-fixing or price coordination, collective refusals to deal (i.e., boycotts), blacklisting, market division/allocation, supply restrictions or other anti-competitive activities that may contravene the Act. If, at any time during the course of a meeting, any Attendee believes that a sensitive topic under the Act is being discussed, or is about to be discussed, they will advise the chair of the meeting and ask that such discussions stop. Similarly, Attendees at any meeting should not hesitate to voice concerns they may have in this regard. Such discussions must also be avoided before, after and on the “fringes” of meetings. For discussion only 3
Background and Objectives The Case for Change ICBC’s Material Damage Programsareoutdated, do not meet industry standards, and lack the controls necessary to curb escalating claims cost trends that are partly driven by increasingly complex technologies in vehicles. ICBC needs a program that: Focuses on long- Rewards and Is built on input from term trends Effectively manages promotes high Industry and is shaping the performance and performing mutually beneficial changes in the glass control. suppliers and sustainable. industry. For discussion only
Background and Objectives Case for Change – Industry ry Pain Points Industry pain points provided valuable feedback to start design of the new program. Feedback included: “ “ “ “ ICBC could provide All participants in the program ICBC requires GWE is not bad more information to suppliers to need to be held to the same “ “ but there are shops standard complete a some number of enhancements “ “ processes not The Glass Industry is that could be People are leaving the required by rapidly changing, ICBC and made industry – retention is “ “ “ “ other insurers shops are not prepared becoming an issue For discussion only 5
Background and Objectives How have we approach chedthe Glass Pro rogram Redesign The De Design Prin rinciples Afford rdability Customer Relation onship Fairn rness Sustainability Glass Program Customers and their Developing a closer The program takes The program is contributes to rate safety are at the relationship with glass into account regional designed to achieve affordability through center of the program industry is mutually differences and benefits throughout controlling program – the design aims to beneficial for ICBC provides life of the program cost and improving maintain or improve and industry players opportunities for all and accounts for efficiencies for customer experience future industry trends industry and ICBC and safety standards For discussion only 6
Background and Objectives Industry ry Advisory ry Committee Feedback ck 6 Total >10 1000 00 Sticky notes Industry 10 10 sessions and ideas Attendees Industry Consultation Consult on Refin ine detaile iled Finaliz ize Develop concepts s wit ith desi sign through program desi sign proble lem Begin in hig igh-le level l Industry workin ing and statement and desi sign Advis isory sessi ssions s wit ith imple lementatio ion success s factors s Commit ittee indust stry experts activ ivit ities (IAC) For discussion only 7
Tiering and Program Structure Glass Supplier r Tieri ring The Glass Program would segment the supplier market into three tiers. Ranking and tier placement of supplier would be conducted annually and measured based on their KPI performance. • Top 20-30% of shops per region • A fixed percentage of shops by region • Tie ier 1 Highest level of benefits • Majority of shops Tie ier 2 • Meet minimum qualifications and KPI requirements specific to regions • New entrants during the assessment period Entry / • Performance Tie ier Shops placed in performance review • Candidates must meet minimum qualification requirements to enter program Applic licatio ion Process ss 8 For discussion only
Tiering and Program Structure Tieri ring Benefits The program is designed to differentiate the tiers and incentivize shops to reach Tier 1, while maintaining tangible benefits as a Tier 2 supplier. Marketing Channels Documentation Claims Processing Financial Benefi fits Highes est ex exposure via Reduced requirements Incr creased ed autonomy – All shops eligible for shared phone messaging and Same as Tier 2, and no No approval required benefits program ICBC shop locator photos uploaded for for exceptions Tie ier 1 Curren ent payment ter erms placement repairs General placem emen ent on Reduced requirements Curren ent autonomy – High-per erforming shops eligible ICBC shop locator Requirement for four All exceptions require for shared benefits program Tie ier 2 vehicle corners approval by PGO Curren ent payment ter erms eliminated No ICB CBC C market eting All existing photo No autonomy – PGO Not eligible e for shared support requirements approval required on benefits program Entry / all claims submitted Performance Tie ier Longer paymen ent ter erms For discussion only 9
Supplier Intake and Requirements Supplier r Evaluation Cycl cle The business-as-usual supplier evaluation cycle would be over 12 months. Supplier performance would be measured by Key Performance Indicators (KPIs) to determine the supplier’s placement and ranking in the Glass Program. Annual Tiering Evaluation Annual Tiering Date Date Date Evaluation Cycle (12 Months) Evaluation n Cycle Evaluation n Da Date Static Tieri ring ng Da Date Supplier performance would be Supplier performance would be The annual tiering date would be a set monitored and evaluated over a 12 evaluated through their KPIs at the end date when promotions and relegations month period. of each evaluation cycle to determine take effect for all shops. This would be potential movements between tiers. be in line with contract renewal dates. For discussion only 10
Supplier Transition SCENARIO: Daz the Expre ress Shop – Transitioning into the new progra ram This example demonstrates a Glass Express supplier and their transition into the new program and movement among tiers. All existing Glass Express suppliers would start as a Tier 2 supplier for the Transition period, after which the first tiering would take place. Program Launch First Tiering Annual Tiering 1 Tie ier 1 Promoted to Tier 1 12 months 12 months Tie ier 2 2 2 Begin as Remain as Tier 2 Tier 2 Entry / 3 Performance Tie ier Relegation to Performance Tier Exit from Program 11 For discussion only
Supplier Intake and Requirements New Supplier r Application and Entry ry New entrants who qualify for entry would be assessed for 12 months before either earning Tier 2 status or exiting the program. Suppliers with at least 12 months of KPI data would be eligible for Tier 1 on the first static tiering date after the assessment period. Annual Tiering Annual Tiering Annual Tiering Application Process • Shops could apply for program any time during the year 3 12 months 2 1 • Candidates would have to meet program entry Program Promotion to Tier 2 Eligible for Tier 1 requirements: Entry after 12-month Evaluation Training and certifi assessment period fications Technology and equipment Financial “good standing” Exit from Program after assessment period For discussion only 12
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