Background and Brief History
Accident Exchange is a prestige vehicle replacement specialist that provides support services to the retail motor industry and ABI (Association of British Insurers) approved car hire on credit to motorists involved in non-fault accidents.
The Company was founded by Steve Evans in 2001 and currently employs over 600 full-time staff at its headquarters near Birmingham and distribution centres in Glasgow and Warrington. Accident Exchange operates a fleet of almost 6,000 executive and prestige vehicles to cater for customers of franchised dealers, contract hire companies and insurers representing, amongst others, Audi, BMW, Jaguar, Land Rover, Lexus, Lotus, Mercedes Benz and Porsche.
The firm’s marketing policy has focused on building long-term consumer centric partnerships allowing each referral source to specify and build the basis of the commercial and trading relationship.
With an average repair cost of £1,800, handling accident claims is serious business for vehicle repairers. It also presents an opportunity for dealers to interact and build valuable dialogue with customers at a time when support is needed most. Delivering a positive and differentiated experience to position both businesses high in the minds of the consumer is vital.
As a result, Accident Exchange has a primary motivation to support and protect brands (dealer and marque) and the equity they have already established with the motoring consumer.
The Group also has another trading subsidiary - DCML Ltd - based in Stockport. DCML provides software to motor dealers and vehicle manufacturers to facilitate the management of courtesy cars and to provide daily hire insurance. DCML has 36 employees.
Location
The Group is based at Alpha 1, Canton Lane, Hams Hall, Birmingham, B46 1GA but has regional representation for Scotland and the North of England in Glasgow.
DCML is based in Stockport.
Relationships
As a business we recognise the value of our commercial relationships.
Over time we have built relationships with some of the larger UK dealer groups and have also engaged, and will continue to engage, in productive dialogue with a number of vehicle manufacturers. We are an approved supplier for BMW and Audi which helps cement our ongoing relationship with this important manufacturer and its associated dealerships.
We take a holistic approach to our business partners. Our experience shows that we will consolidate on existing relationships by offering support to the dealer or body repairer beyond the act of providing replacement vehicles for their non-fault customers. By adopting this approach we have substantially strengthened our key relationships. This means that we have been able to focus on the quality and difference in our service offering rather than engage in a battle with our competitors which would threaten margin.
We also consider that our relationship with insurers is very strong. We are actively seeking ways to improve these relationships and deliver greater value to them. Accident Exchange is a subscriber to the Association of British Insurers (“ABI”) General Terms of Agreement which is a non-contractual set of protocols agreed between the credit hire industry and the insurance industry. The protocols were established with the aim of fixing the recovery levels and costs associated with vehicle hire at lower rates in return for the insurers guaranteeing prompt settlement of the invoiced hire charges. These protocols have been proven to work to date.
The relationship between the credit hire industry and the ABI is managed predominantly by the Accident Management Association (AMA) and this organisation has continued to play a key role in the development of the industry. The AMA has over thirty member organisations and continues to be key in representing the interests of the industry particularly with regard to relations with the insurance community and negotiations in respect of pricing and payment terms under the ABI protocol. Accident Exchange is a supporting member of the AMA.
The Group recognises its end-user clients and its suppliers as two distinct types of customer.
For end user clients we provide mobility in the event of a non fault accident. We deal with all of the aggravation in resolving the claim from liaising with the client’s motor insurer to providing replacement transport, organising repairs and helping the client claim compensation for any injury or losses they may have suffered.
Customer Service
Customer service levels for the end-user (the motorist) are non-negotiable. We never forget that our customers are always somebody else’s customers first.
Through a continual investment in technology, procedures, people and training, we monitor responses to customer feedback at each, and every stage of our service delivery process.
Importantly, in-house designed web-based software allows senior management to intelligently monitor the day-to-day handling of claims. The same facility allows dealers and bodyshops to remotely access the progress of their customers.
The following demonstrates the customer centric business philosophy operated by Accident Exchange:
- Accident Exchange appoints dedicated account handlers for each dealer. Their role is to provide on-site assistance on a daily basis in the management of estimate conversion and general admin duties involved in the accident repair process. This ‘hands-on’ approach has been successfully adopted by BHM in Birmingham to produce significant developments in terms of business activity and conversion for both the introducer and Accident Exchange.
- Reciprocal vehicle buying arrangements form part of every dealer partnership. For example, Rydale, the leading BMW dealer in the West Midlands, supplied almost £1.4 million vehicles in a six month period, on the basis of increasing levels of business referrals. The Dealer also benefits from the placement of courtesy cars at their location to assist them in helping customers who do not qualify for the Accident Exchange service.
- Technology forms a key ingredient in the relationship building between Accident Exchange and the dealer, between the dealer and the customer, and between Accident Exchange and the customer. As a prime example, the firm has developed BEACON, an online application (designed with input from dealer principals and bodyshop managers) that helps dealers manage repair estimates, and by process, improve conversion levels, eliminate costs and maximise profitability.
- Since July 2003, Accident Exchange has supported Park Lane BMW, the largest BMW dealer in the UK, during their integration and re-organisation of their sales territory, the opening of two new locations and the relocation of their bodyshop to an external supplier. Accident Exchange directors and regional manager provided support on a weekly basis throughout this transition period. The net result will be the funding of a full time staff member to bank the developments made since July.
Accident Exchange has differentiated itself from its competitors by providing a higher level of customer service to dealers, repairers and the end user, against a background of greater commercial efficiency.
Every action undertaken is driven by the recognition that business referral sources (dealers and bodyshops) need more than just a rental company to supply a vehicle to an accident victim.
They want to grow their own offering, distinguishing themselves from their own competition, with a bespoke service that will match their own specific demands and needs.
Technology remains the heartbeat of the business, delivering an electronic paper trail that allows dealers and bodyshops improve internal communications, protect the investment they have already made in the customer and above all, maximise the bottom line.
Promotion of Customer Care Has Contributed to Improving Our Business
Accident Exchange has developed effective procedures and processes that aid the claims handling process.
By responding to a series of database driven questions, software programmes (again, developed in-house) allow staff to assess and resolve legal, mitigation and liability issues in a uniform, consistent and efficient manner. This ensures that they only accept and approve referrals arising from accidents where liability can clearly be attributed to the third party and where there is an identified third party insurer against whom a claim can be pursued.
The entire Back Office process is geared towards optimising the revenue and profitability from each vehicle. Return on fleet investment is a key consideration to Accident Exchange given that profitability is a direct consequence of the number of cases approved, the length of the ensuing hire period and the average hire rate of vehicles per day. The utilisation rate of Accident Exchange’s vehicle fleet is high.
The Business has Benefited Financially as a Result of Improvements in Customer Care
The fleet is renewed regularly so as to maintain Accident Exchange’s reputation for providing a first class service focused on achieving high levels of customer satisfaction. The Company has grown its fleet of 23 prestige vehicles in 2003 to almost
5,000 vehicles today.
Accident Exchange has been profitable at the operating level since inception in 2001. For its reporting period to 30 April 2003, the Company achieved profits before tax of £169,000 on a turnover of £657,000. For the year to 30 April 2004, the comparable figures were £1.11 million profit before tax on a turnover of £4.12 million and for the year end 2005 the Company reported profits before tax of £6.7 million on £21.7 million turnover. We are delighted to have continued this growth for the year ended 30 April 2006 when turnover reached £53.5m and profit grew to £17.9m.
Progressive growth has been the catalyst behind the Company’s accelerated ability to float the business on the AIM market of the London Stock Exchange in April 2004. At the end of 2006 the Group completed its move to the Official List of the London Stock Exchange.
Financial Data
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