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Volume 7    Issue 2            March/April 2005

Field of Vision
     from the Editor

Is NAGS Necessary?
by Charles Cumpston

The outpouring that we got in response to the letter we ran from ex-NAGS head Catherine Howard on our GlassBytes™ site was incredible. More than 125 responses came in within a week.

The responses varied all over the lot but most of them also had a similarity. This revolved around three questions:
1. Why is a publisher setting our prices?
2. Why is this rebalancing being done and why is it being done now?
3. Do we need NAGS or should shops set their own price?

These are all very good questions worthy of answers and discussions. 

Why is a publisher setting prices? NAGS would say they don’t. If you talk to NAGS, they will tell you that they publish a “benchmark” price—a yardstick if you will—and that individual companies are free to use or not use it as they see fit. The real problem lies in the fact that insurance companies and other third party administrators have traditionally used NAGS prices as a starting point for their own discounts and that our industry has accepted them. NAGS is just a publisher of information. Ultimately, each company is responsible for the prices at which it does business.

NAGS prices work because all those using them believe they have the same value. It’s similar to how we look at the dollar. In the end, the dollar is just a piece of paper with green ink on it, but because all of us believe it has a different, higher value, it does. It’s a matter of faith. In certain countries, when people lose faith in their currency, it gets revalued. NAGS has made an attempt to revalue its currency to keep it relevant to its users. The problem now arises that certain parts of its population (i.e, glass shops, and distributors) are not putting their faith in the revalued currency while others (the insurance industry) are.

Now what happens? Respondent after respondent said that prices have gotten so low and the NAGS list price has become irrelevant that shop owners want to set their own prices based on what they pay and what they need to receive in order to stay in business.

It still seems too early to tell if this is a genuine turning point in the industry or just another stop in the change that the industry has, and continues to go through. The NAGS rebalancing went into effect February 28, just as this issue went to print and after it will come into your hands. Thus, you will have knowledge which I do not have as I am writing this.

And where have the insurance companies been while this is going on? Silent, as they always are at this stage with the industry. They are not playing their hand (assuring the industry that they are going to pay for labor, a cornerstone of the rebalancing) until they feel certain what is going to be in their best interests.

Is this an industry that has no control over its destiny, as respondent after respondent lamented? Or is this the turning point when the industry does take over its price setting destiny—with each individual shop determining what it is going to bill for a glass claim? 

In my 25 years of covering the industry I have not seen such a tense period since that infamous Phoenix meeting when the concept of networks was announced. 

Charles Cumpston is the editor of AGRR.

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