Volume 33, Number 4, April 1998

State Farm and Windshield Repair: Face-to-Face - 4/98

by Tara Taffera

It was a long awaited moment at the National Windshield Repair Association Convention. The meeting room was filled to capacity with attendees eager to hear what State Farm vice president Bill Hardt and national glass manager Tony Ferrara had to say concerning State Farm's recently rolled out Glass Central Program. Although it had the potential to become raucous and ugly, the professionalism and openness of both parties kept the session from becoming so. While Hardt and Ferrara discussed the rationale behind the insurer's Glass Central Program, the meaty issues concerned steering, networks (though as Hardt puts it, "this is not a traditional network"), trend toward automation and State Farm's long crack policy (or lack of it).

Hardt began with a brief history of the insurer's Glass Central program, which completed its rollout in February. With the goals of maintaining competitiveness and providing quality service, State Farm devised this system with the policyholder in mind.

According to Hardt, because State Farm spends $450 million per year on glass alone and processes 1.7 million glass-only claims, something had to be done to streamline operations—enter Glass Central and by extension LYNX Services From PPG. LYNX is the claims processing center to which State Farm subcontracts glass-only claims processing.

"The bills were coming in a million ways. That's why we went to automation," said Hardt. This move allowed the company to reduce its 300 employees in each region to a mere 30 and in the process become more efficient. The process forces technicians to become more efficient as well. "If you do the work and don't bill us in 90 says, don't bother," said Hardt.

Aware that many technicians may oppose automation trends, Hardt responded, "It's here and it's the only way to do business," adding, "more automation is an absolute certainty." In fact, Hardt announced that this summer electronic funds transfer will be available.

Rapid Repair Ratio Increase

Hardt reported that while 1.2 million windshields per year are serviced nationally, the repair rate is 25 percent (three percent of what was originally going to be repaired gets replaced). He said State Farm's rate was 30 percent in December alone—before the rollout was even complete. Hardt said those numbers will jump even higher after the rollout is finished. This statement prompted technicians to ask why then, when policyholders call, couldn't they be told that repair was an option or of its benefits. Hardt was adamant. "We are ultra-sensitive to any kind of steering," he said.

When a policyholder calls a State Farm agent he or she is connected to LYNX. The individual may request a particular shop, in which case the LYNX representative calls that business. But, there is a catch—a technician must answer the phone. If not, the LYNX representative asks the policyholder, "Would you like to continue to hold or would you like to try another shop?" If the answer is to call another shop, the representative simply phones the next business on the rotation list.

Many NWRA members stepped up to the mike to express opposition to this policy. Questions came rapidly. What if I'm on the phone when LYNX calls? What if I'm with a customer and can't get away? Ferrara simply repeated that the technician must take steps to ensure they are present to take the call. Hardt put it bluntly, "I know you don't want to hear this, but most people don't give a rip where they go for a repair."

Hardt told attendees of some of the lengths people go to with the goal of obtaining business. One technician who wanted to ensure gaining customers with the new rotation method had his business listed with 14 separate phone numbers, but really only had one location. State Farm representatives whose job it is to periodically search for "fishy" methods such as this discovered his ploy.

Revisiting Long Cracks

So, what happens now that the Glass Central rollout is complete? "It's time for me to start doing the things I've been telling you I'm going to do," said Ferrara. One priority is to evaluate State Farm's long crack policy. "You've been telling me State Farm needs to look at the policy and you've finally convinced me. We're now going to look at the whole big monster,"said Hardt. Hardt said when windshield repair first started the industry made a mistake of publicizing that once a repair was complete, the crack would no longer be visible. "If I can still see that crack when you're done, I haven't put it back as good as it was,"said Hardt.

Overall, many NWRA attendees said they enjoyed the State Farm talk because it was "blunt and to the point." Dee Morse, Dee's Windshield Repair, said although she didn't agree with everything State Farm said, she was impressed with the presentation. "It was evident that they are willing to listen to our concerns," she said. A statement Hardt made seemed to echo this sentiment. "I don't think you're giving yourself the credit you deserve, you have battled tremendous odds," he said. "You're evolving into a tremendous industry and we root for you quietly."


Tara Taffera is the assistant editor of USGlass magazine.

  Copyright 1998 Key Communications, Inc. All rights reserved. No reproduction of any type without expressed written permission.