Bulletin One – February 2020
As presented at the RIA Australian Conference in June 2019 the local council are committed to establishing an advocacy voice in Australasia to promote our industry, its professionalism and its value.
So what is advocacy? “ public support for an idea, plan, or way of doing something “– Cambridge Dictionary .
Creating an independent advocacy position and then funding this will be an expensive exercise and therefore we are pleased to announce that RIA Australia and RIA USA have agreed that all profits from local activities will remain in Australia to assist with funding of the advocacy movement. In addition, part of annual membership fees will also be dedicated to this cause.
Restoration companies must unite, and deliver through our advocacy initiatives claims practices that are professional, financially sustainable for the providers whilst maintaining professional standards and practices. Without the unification of the restoration industry there will be a continued reduction in quality to match the ever decreasing remuneration being offered for restoration services. The Australian Restoration Industry has been active since the early 1980 where a handful of builders and cleaning/restoration companies serviced a small proportion of insurance claims. Over the following four decades more and more players entered the “restoration market” and competed to gain market share through technology improvements, improved services based on facts not fiction, and competitive tension. Regrettably often just on lower pricing.
In parallel with the expansion of service providers there was major consolidation of the insurance market where we saw several hundred insurance companies in a relatively short period of time dwindle to around 40! This consolidation came about through natural decline of some insurers but predominately through acquisitions. Banks became a large part of the industry and their desire to gain more and more market share led to this consolidation process accelerating faster than most of the restoration industry predicted.
As with any acquisition the motivation the insures wanted was to secure more market share, amortise and reduce their overheard across high revenue streams, and look for efficiencies and competitive advantage over smaller insurance players thereby providing hopefully a better outcome for their shareholders.
Two major dominant players evolved over this period through acquisitions whilst retaining the various market brands that they acquired in the hope of keeping customer loyalty and therefore premiums for their respective brands.
Fast forward to today and we have four major insurers dominating the domestic insurance market and then smaller specialist insurers and overseas insurers underwriting the balance.
How has this impacted the Restoration Industry?
The dominance of four major insurers and their background inevitably led to procurement departments looking at their National spend in various claims departments.
Starting with the car claims, then building and then eventually the restoration of building and contents these insurers then started to enforce their acceptable pricing practices onto the service providers through a “take it or leave it” attitude knowing that those that relied on the workloads from these same insurers needed the volumes to survive in an ever increasingly competitive market.
This was exacerbated by the fragmentation of the restoration market with no singular entity representing the restoration industry.
The insurers therefore were (and are still today) able to leverage this lack of market unity and respect to continue to drive margins and service levels down.
So why hasn’t to date RIA Australia been able to start progress towards independent advocacy?
In short, a lack of time, of money, and the inability of any RIA council member to take this role or lead through the threat of personnel business decline if insurers were to see any individual or group of companies disrupt their agendas.
RIA Australia will now create an independent advocacy budget using funding from the profits from local events and part of membership fees.
These funds will be used to employ an independent advocacy person to represent our industry, as a whole, under the RIA banner.
The selected candidate will deliver:
- Insurance lobbying
- Insurance training
- Restoration market feedback from insurers to RIA
- Attending industry events as the RIA ambassador and presenter
The advocacy initiatives will take time, but RIA must start somewhere, and we need your support.
We ask that you actively promote RIA wherever you can, encourage other restoration providers to become members of RIA and equally participate in events be they national conference or local chapter/training events.
The restoration industry must unite to survive and be respected.
Bulletin Two – May 2020
As previously advised the Restoration Industry Association USA (RIA) and our local chapter agree to maintain local funding towards the advocacy role in Australia.
This is excellent news for RIA Australasia members as this will enable a return on your membership fees, the local RIA advocate once engaged working for the legal and financial interests of all member restorers.
With sufficient support from our members through membership fees and attendance at local events, RIA will provide advocacy for restoration professionals across the country and seek to influence legislation and/or reform as needed.
RIA USA Advocacy is quoted as saying:
“With growing frequency, restorers report frustration and exasperation with price-slashing, administrative burdens, and Monday-morning quarterbacking by third-party administrators (TPAs), insurance adjusters, and third-party claims consultants. Restorers suffer from stagnant or declining prices in standardized pricing/scoping platforms that do not reflect real world increases in labor and operating costs. They also struggle to comply with laws that fail to take into account the unique challenges faced by emergency service contractors…..The net effect of these problems is far-reaching. Some of the best and the brightest contractors are withdrawing from insurance company preferred vendor programs, or greatly limiting the geographic areas they will serve, in order to minimize travel expenses. Others are getting out of the business altogether. This attrition gradually forces insurers to assign work to contractors with less training, efficiency, and expertise, which lowers the quality of service received by insureds. When lower quality service is provided, the insurance companies’ liability exposure increases because when customers take legal action for substandard work performed by a preferred vendor, they usually sue the insurance company as well. When insurance companies are sued, they raise premiums to offset the loss––and the insured suffers again. Obviously, when jobs are assigned to less efficient contractors, it delays the resolution of claims, which increases the insurance companies’ expenditures for additional living expenses. This tarnishes the reputation of the restoration industry and decreases the confidence of the public and the insurance companies in the restoration industry”
Sounds very familiar to most local restorers?
For the betterment of the industry and all its stakeholders’ matters must change to avoid harm to restorers, their customers, insurers, and the industry.
RIA USA are well down the path of advocacy and there is evidence that the industry is listening. We here in Australasia are not as advanced yet, but the securing of the financial backing should place us in a position to start to recruit for an advocacy representative early in the new financial year.
The RIA wants to now unite the restoration industry and voice our issues through advocating for the best interests of restoration contractors. We will develop strategies to help create and maintain equity between restorers and insurers and their partners. RIA will advocate for the financial and legal interests of our restoration members while working collaboratively and fairly with insurers and the other stakeholders in the restoration process.
So Where to Now?
- Establish and advocacy sub-committee – Done
- Get member feedback on your issues and needs
- From your feedback agree and formalise position statements for our industry
- Recruit a restoration advocate
- Inform and Update Membership on progress
- Maintain advocacy momentum
Our aim is to raise locally in excess of $100,000 to enable RIA locally to have the confidence to recruit a suitable candidate knowing that we have the financial resources to sustain their efforts longer term.
We are well on the way to having this financial stability thanks to your ongoing membership and support of local activities, especially the annual conference. Regrettably 2020 has seen this year’s conference postponed (due to Covid -19 restrictions) and therefore the associated additional funding for the advocacy from this event has also been temporarily lost.
Once RIA locally have secured adequate financial resource for this advocacy, we will hire a Restoration Advocate. Not volunteer speaking for RIA in their spare time, the Restoration Advocate will be a paid professional with specific goals. To ensure there are no conflicts of interest and fears of retaliation, we have decided that the successful candidate will not be currently engaged in the restoration industry. But the candidate will have industry experience and understand its history.
The candidate wont be easy to find, so please get the word out that RIA are interested in potential candidates and can be contacted initially at firstname.lastname@example.org for more information.
We Need Your Help
- Through your ongoing membership of RIA.
- Spreading the word to other restorers, that are not current RIA members, to get on board and support the advocacy cause.
- Consider a donation to RIA Australasia to support the advocacy movement.
- Look out for and nominate any potential candidates for the upcoming advocacy position.
Please ensure that when discussing the RIA advocacy with anyone you make it clear this is not a war of “us against them” but rather a need for restorers and insurers (and their stakeholders) to have a clear and fair working position that allows for the sustainability of our industry with experienced and qualified providers.
We look forward to updating you as matter progress and seeking you individual input into the needs as you see them ,so that we can get consensus on what need addressing as a priority for our members.
Bulletin Three – April 2021
It’s hard to believe that it’s been ten months since our last advocacy bulletin – but what a year we all have had.
Whilst we have not been able to travel that much rest assured the advocacy committee have still been meeting monthly to progress this important initiative for our members.
We conducted a survey of our members back in November 2020 and the results were very encouraging indeed.
The results speak for themselves:
Over 90% of respondents would like a dedicated advocacy person to manage the advocacy movement with the most important thing the advocacy person should be focused on is developing AU standards, lifting the quality bar so to speak.
The members felt that they would benefit from this position by all providers competing fairly, providing our customers work to a standard, and cut out “cowboys”.
Again with over 90% support the second most important thing our members thought the advocacy person should be focused on is promoting the industry, gaining recognition for the industry and pricing. The members that responded suggested that this will help with attracting good staff and assisting with profitability for our members.
Many members have offered to assist with this advocacy initiative (thank you), and I am sure we will be in touch once we understand our full needs and budgets to implement same.
Interestingly of those that responded 91.30% are willing to pay a higher membership fee if the increase was directly targeted to fund the advocacy movement. The advocacy committee have forwarded our findings to the management committee with our recommendations on this matter.
Fourteen (14) members have actively offered to sponsor this advocacy and once we finalise our budgets then these may be considered and called upon.
Additional comments in relation to the advocacy person or advocacy movement included:
- The need to hold the Industry to standards. I’m tired of seeing Restoration companies putting equipment in with no idea as to what levels of Air movers and Dehumidifiers are required, or how to create and maintain a drying chamber.
- Go for it.
- Happy to support and encourage a healthier industry for all participants.
- Align with our movement, they (assume advocacy committee) need to talk to a lot of us to know what we want, not what they think we need.
- I fully support RIA with this initiative.
- Until the standards are recognized within Australia and our industry regulated Insurers will continue to dismiss our industry as a whole in comparison to the building trades and we will always be dispensable – perfect example is the current environment of Insurers putting restoration in the hands of builders.
- Long overdue but it’s starting to get momentum.
- Could be beneficial to target a current non industry Executive.
- Just get it moving.
Regrettably, we haven’t managed to “get it moving” as fast as we would have liked, budgets have been restricted with lack of our 2020 conference and ability to run educational fund raisers throughout the year. But there is light at the end of the tunnel, and we hope to finalise our budgets in coming weeks.
Knowing what we can spend will prioritise our actions.
So where to now?
- Establish an advocacy sub-committee – Done
- Get member feedback on your issues and needs – Done
- From your feedback agree and formalise position statements for our industry- In Progress
- Recruit a restoration advocate- Once budgets are understood and agreed
- Inform and Update Membership on progress- Ongoing
- Maintain advocacy momentum- Ongoing
Agreed we are not far enough down the track but please remember that this is being managed through volunteers from our membership, which we greatly appreciate, and to date without any official funding.
Our aim is still to raise locally in excess of $100,000 to enable RIA locally to have the confidence to recruit a suitable candidate knowing that we have the financial resources to sustain their efforts longer term.
We still need your help
- Through your ongoing membership of RIA Inc.
- Spreading the word to other restorers, that are not current RIA Inc. members, to get on board and support the advocacy cause through joining RIA Inc.
- Consider a donation to RIA Inc. Australasia to support the advocacy movement.
- Look out for and nominate any potential candidates for the upcoming advocacy position.
RIA Inc. Advocacy and Government Affairs (AGA) USA
Our local advocacy committee is keeping close to our USA counterparts to ensure that the overall position of advocacy is similar in its direction, but adapted for local issues and needs. They are pleased to see us start this process and I encourage you all to visit their website to review their works to date (many of which can be used locally also).
Log in to get all their working papers.
We hope to see you all support the 2021 Conference and Trade Show by attending, and we will have an advocacy session at this event to update all and gain further membership feedback.
Until then keep well, keep safe, and keep offering superior RIA Inc. standard of work.
RIA Inc. Australasia