Industry Responds to Gross' Claims Journal Column
March 13, 2013

by Jenna Reed,

After Paul Gross, president and CEO of HSG and Insurance Claims Management Inc., addressed the insurer/third-party administrator (TPA) relationship in an article for Claims Journal, the industry responded to™/AGRR™ magazine.

Some agreed with Gross' description of the third-party administrator (TPA)/glass shop relationship.

"Paul's explanation of TPA's was right on," says Kerry Soat, CEO of Fas-Break Inc. "Hopefully someone was listening. In the past, glass shops dealt directly with insurance companies and negotiated prices with each company. Obviously, as the glass business grew, they required more staff at the insurance company thereby creating a larger labor cost to administer claims, not to mention benefits."

Also offering his thoughts,™ blogger Neil Duffy, owner of Auto Glass Menders in San Jose, Calif., adds, "Reading Paul's opinion piece is like sitting through a sociology lecture, both seem like a re-statement of the obvious. You have immutable forces at work here. Insurers want to keep their money and look for efficiencies or weakness in the market place. You have glass shops which will go to any lengths to increase profit margins, especially since insurance billings in many cases lack oversight. TPAs have become golden funnels to their in-house installation arms."

Gross also discussed the topic of "auto glass claims harvesters," which the industry has seen in recent years.

"Most of the aggressive claim-harvesting Paul mentions as unscrupulous is the end result of attempting to work around TPAs," Soat says. "This isn't to say some operators haven't been overly aggressive in their approach, but for most operators, we are merely bringing the repair possibility to their attention."

Meanwhile, Jay Sampson of Safety Auto Glass in Dallas, says, "Amazing our fragmented industry can't seem to get together with a cohesive strategy on an issue that's as plain as the nose on our faces. FPA (first-party administrator) … that may stick. Nice one, Paul."

Gross' column is available online here.

His article also has been a popular topic of discussion on the™/AGRR™ magazine message forum. Click here to weigh in with your thoughts.

This story is an original story by AGRR™ magazine/™. Subscribe to AGRR™ Magazine.
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