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 Inc. Australasia 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.
Why
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 could be continued pressure to reduce quality to match the 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 Inc. been able to start progress towards independent advocacy?
In short, a lack of time, of money, and the inability of any RIA Inc. 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.
The Solution
RIA Inc. 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 Inc. banner.
The selected candidate will deliver:
- Insurance lobbying
- Insurance training
- Restoration market feedback from insurers to RIA Inc.
- Attending industry events as the RIA Inc. ambassador and presenter
- The advocacy initiatives will take time, but RIA Inc. must start somewhere, and we need your support.
We ask that you actively promote RIA Inc. wherever you can, encourage other restoration providers to become members of RIA Inc. and equally participate in events be they national conference or local chapter/training events.
The restoration industry must unite to survive and be respected.
RIA Inc. Australasia
Advocacy Committee
Join the Movement
Become a member of the RIA Inc. and support the advocacy movement. Your membership will help the movement and will grant you access to a number of resources and benefits offered to RIA Inc. members.