If it’s an insurance-led arrangement then the insurance
company pays, whereas our attitude is slightly different,” says
Nichols. “The damage in the ?rst instance is somebody’s fault,
there’s liability attached, so our ?rst port of call is the carrier
and we use the insurance and the insurance policy as a last
resort. Changing our clients’ attitudes as to how insurance
should work and how the process should work, at the
beginning was challenging. Now, it’s about looking to the
carrier as the responsible party and at the insurer as a last
resort.
Also, if you make those recoveries and people are paying
for it, the knock-on effect is that they focus on their damage as
well. So it’s an all-round process. Financially, they’ll not want
to pay that in the future.”
Once the original consultancy project had been completed,
Sevatas was invited back to Russia to completely strip back the
claims process and work closely with the client to agree a
robust carrier procedure which formed part of the carrier
contracting. They outlined to carriers what was required of
them in a contract, and introduced tough service levels –
telling them what they should deliver and when they should
deliver it, responding to claims from the agent and paying the
recovery. There are some tough penalties imposed on the
client if the carrier doesn’t adhere to the process, and it still
forms part of many contracts today.
We’ve had a close working relationship – not just with the
dealers but with the carriers as well – and I think that’s really
important,” stresses Nichols. “My colleague Pavel Pistun, Head
of the Claims Department in Moscow, on a monthly basis
provides reporting on damages, on damage trends and on risk
management for the carriers. So we’re not just telling them
that they should pay the claims, we’re also giving them tools to
help combat and reduce damage going forward.
It might be something as simple as the loading procedure.
For example, they’re always getting bumper damage, so we tell
them to take care unloading or loading the vehicles. The level
of detail we go into is enough for the carriers to be able to use
it. We also regularly provide service level performance to the
carriers and also to the client – the clients use it for
benchmarking and also as part of their purchasing.”
Like many companies, Sevatas expected Russia to be the
Wild West’ and unmanageable, with infrastructure problems
and damage rates as high as 10-15%. In fact, earlier this year,
Pavel Pistun, and the director were consulted by a
manufacturer and told their damage rate was 47%, which
suggests a process that has gone absolutely wrong. Since
applying their standard procedures with existing clients, the
dealer satisfaction has markedly increased, as well as that of
the carriers. The damage ratio has reduced and there are better
processes for reclaiming money through insurance.
Certainly one of the things we’ve identi?ed, and
recommended to other clients, is service levels with the
carriers,” says Nichols. “As a key thing, that’s now been rolled
into European logistics with that original client. We’ve got an
approach, an outlined process to give them, and certain targets
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a target of claims ratio, a target of cost per vehicle, and
targeted recovery payment performance.
One of the things we do for our clients in Russia is to
audit the dealers. Pavel visits dealers and audits their internal
claims processes and their compounds, areas and the external
factors to see if the dealer performance can be improved. If
there’s non-compliance or if there are improvements required,
some of the penalties applied to the dealers are quite severe.
There is a big focus on improving carriers and also on working
with the clients to focus them on their dealer group. That
approach is something we’re also using with that particular
client in the rest of Europe.”
It took time to set up business in Russia, appointing a
legal Director, having a stamp from the General Director, a
signature on all of?cial documentation and organising
interviews and recruitment took longer than it would in
Europe. Once established, Sevatas started speaking to the
carriers to agree on a buy-in and collaboration and introduce
measures to streamline the recovery and pay-out process, to
the delight of the dealers and as a bene?t to everyone. The
insurance agents, and Pistun in particular, are now a focal
contact point for the dealers even ?ling claims electronically
and speeding up the practice still more.
The key thing for us is to offer ‘value-added’,” says
Nichols. “Where we’ve been employed we’ve certainly made a
difference by working very closely with dealers. As we do the
dealer auditing, it’s good to see the dealers satis?ed.
Some of the communications and contacts that we’ve
made have made relatively straightforward, and that’s because
of our good team and the leadership of Pavel looking after the
of?ce. We’ve certainly not experienced a huge level of damage
claims; it’s certainly below 3%.”
Recovery rates have improved and one of Sevatas' clients
has actually reached 55% of recoveries against carriers, up from
9%.
The average is assumed to be as low as 25%. It’s a big
change to the way the clients approach recovery from the
carriers. The carriers now undertake a reasonable amount of
liability, decreasing bureaucracy for both them and the dealers,
whilst improving logistics conditions. Sevatas has also
transferred techniques from Russia back to Europe in order to
improve relations between OEMs, carriers and dealers. It’s not
just about looking at a compound or looking at a transporter
audit, it’s about improving the entire end of the supply chain to
provide a @awless product for the end customer. The future of
automotive outbound logistics could depend a great deal on
the advances made within the insurance methods available,
and what has already been learnt in Russia.
a
Pavel Pistun, Head of the Claims Department in Moscow, Sevatas
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