Concerns move by insurer IAG to open its own panel beating shop will restrict choice for policy holders

Our biggest insurance company is planning on trialling its own panel beating service, bypassing the collision repair industry.

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Neil Pritchard says customers will have to pay extra in their premium if they want to have choice of repairers. Source: 1 NEWS

IAG is planning to open a trial panel beater of its own later this year, in East Tamaki, Auckland.

IAG, through brands like AMI, NZI and State, has roughly two thirds of the insurance market in New Zealand.

Neil Pritchard, General Manager of the Collision Repair Association spoke to TVNZ 1's Breakfast about the implications of IAG closing the circle and controlling the full process, from claims to repair.

“It’s the lack of choice to the consumer that concerns us,” Mr Pritchard says.

“Freedom of choice will be eroded in this new model because not only have IAG said they’re going to open their own shop which is due to open next month, they’ve said they’re going to change the wording of their policy to restrict choice.

“If you want choice of repairer, you will pay extra in your premium,” Mr Pritchard says.

IAG says they’ve made the move because customers have had to wait too long to get their car repaired.

But Mr Pritchard says it may amount to anti-competitive behaviour by controlling where policy-holders go.

He says the Commerce Commission has been approached about it and says they are “quite comfortable” with one shop as a trial.

“What if there’s then more and more (IAG) shops? Does it then become anti-competitive? I would say that it does,” he says.

IAG says, however, customers will be able to chose who carries out repairs on their vehicle.

"The customer gets to choose which repairer they go to, whether that is a member of our approved repairer network, Repairhub or otherwise," said executive manager of claims services Dean MacGregor in a written statement.