Nobody is ready to pronounce Idac dead yet. But the Independent Damage Assessment Centre scheme clearly is ailing.
It was started in 2002 and touted as the hassle-free way for motorists involved in accidents to get their vehicles fixed and their insurance claims settled smoothly.
For motor insurers, it was a way to beat unscrupulous repair workshops that exaggerated the claims made on damaged vehicles.
The scheme is still around. Thousands of motorists with the misfortune of being in accidents still fill up their Idac forms dutifully and get their vehicles to an Idac centre before going to a workshop.
The trouble is, motor insurance companies that are such critical players in sorting out post-accident claims and counter-claims have been quitting the scheme.
From the start, three insurers - AIG, AXA and Nipponkoa - did not want to be in.
By the end of last year, only seven insurers remained in the scheme - a quarter of the original number.
NTUC Income is the biggest, with around 20 per cent share of premiums collected. The other six companies have less than 5 per cent share each.
The number of Idac assessment centres has also shrunk to 10, from 14 at the peak. More are expected to close this year.
What appeared initially to be a viable business for inspection centres may no longer be so.
Last year, publicly listed Vicom handled 29,400 damage assessments and accident reporting cases - 37 per cent fewer than in 2004.
When The Straits Times dropped by its Sin Ming Drive outlet on a Friday evening, only one car was processed in over an hour. Previously, there would have been a queue at this centre.
What happened to Idac? Some of the answers date back to its birth.
The scheme was set up by a General Insurance Association (GIA) taskforce led by Mr Tan Kin Lian, the former chief executive of NTUC Income.
It was meant to be an effective way to clamp down on inflated claims, which had been blamed for underwriting losses incurred by the industry during the 1990s.
With Idac, motorists involved in an accident would send their vehicles to an Idac centre to be inspected by independent assessors.
This would prevent unscrupulous parties from exaggerating the damage after the vehicle is sent to a workshop.
Mr Rudi Spaan, former president of American Home Assurance, a member of the AIG group, said Idac was a good idea, but it is not a one-size-fits-all plan.
"You cannot impose a business plan on every company," he told The Straits Times before leaving for a new posting in Taiwan.
"In AIG, we already had a very good way of controlling our claims, and we do not want to inconvenience our customers any more than we should."
Indeed, most insurers who dropped out said their policyholders did not like having to go to an Idac centre first, instead of heading straight to their preferred workshop.
Insurers did not like having to fork out $130 for each Idac accident report, especially when they already had their own damage assessors to do the job.
For Mitsui Sumitomo Insurance, the push factor was exactly this cost. A manager lamented that the company was paying more than $100,000 a year for damage reports on motorcycles alone, "so we decided to save the money".
For motorists who are insured with Idac members Federal Insurance, First Capital Insurance, Mayban General Assurance, Overseas Assurance, Tokio Marine & Fire, United Overseas Insurance and NTUC Income, they will still need to send their accident vehicles to an Idac outlet.
The others - some 62 per cent of the motoring population - are not required to do so. But they still need to fill in the Singapore Accident Statement before sending their cars to a workshop.
What next for Idac?
NTUC Income has said in the past that it would be prepared to go it alone even if other insurers dropped out of the scheme.
The company did not respond to queries from The Straits Times for this report.
Few motorists have mourned the shrinking Idac scheme. Many are indifferent, and some think it has done little for them.
Mr Jaafar Mohamed, 34, who was involved in a head-on crash in Malaysia in December, said it took Idac one week to arrive at an assessment.
His year-old Kia Cerato was written off, and he was compensated with $41,000.
"What is frustrating is that they took so long and they do not give any information on how they assess the damage," said Mr Jaafar, who works as a piping designer for the oil and gas industry.
Retiree Lee Phin Shin, 57, wondered if the Idac scheme did anything to help lower his premiums.
According to the GIA, average premiums continued to climb even after Idac was implemented. In 2003, they peaked at $982, 30 per cent more than 2001's average.
Premiums then began to slide in 2004, when motor insurance became profitable for the first time since 1991.
In 2005, the industry turned in an underwriting profit of $46.7 million from motor insurance, and average premiums fell to $880.
But the fall in premiums is not attributed to Idac. GIA said motor premiums went down steeply because of keen competition.
Motorists interviewed said the Idac scheme did not always deliver on the promise of cutting out the hassles after an accident either.
And there have been complaints about shoddy repairs.
Workshop operators have blamed Idac assessments that are made from a visual inspection of external damage.
Insurers in the scheme will usually conduct a reverse auction online, and the workshop with the lowest quote often secures the job.
Because of this, some workshops gloss over internal damage, a practice that could compromise the car's future crash-worthiness.
They are also forced to resort to using parts from salvage yards so as to be competitive.
Income has said that more than 90 per cent of its customers have been happy with repairs.
Authorised workshops operated by motor distributors say, however, that structural damage is not easily visible, and most motorists would not know from merely looking at their repaired vehicles.
"They are happy as long as the paintwork is done and the car looks shiny," one said.
Mr Joey Lim, representative of the 475-member Singapore Motor Workshop Association, has been a vocal opponent of Idac.
"The situation of bad claims is worse now," he said. "Touts are on the road everywhere. Workshops that are hungry and desperate for business pay them $1,000 to $2,000 per case. It used to be $200 to $300.
"So now, when you have an accident on the expressway, the touts appear within five minutes."
Mr Lim said his business suffered because he does not use touts.
Asked what would be the best way to control inflated claims, he said: "You must start with honest, diligent damage surveyors.
"And the law must act against the bad eggs. Throw a few in jail, and the rest will get the message."
How Income manages vehicle repairs at its workshops
I refer to the article, 'Bumpy road for accident repairs scheme' (ST, Feb 26).
It was reported that insurers in the scheme will usually conduct a reverse auction online, and the workshop with the lowest quote often secures the job.
Because of this, some workshops gloss over internal damage, a practice that could compromise a car's crashworthiness. They are also forced to resort to using parts from salvage yards to stay competitive.
NTUC Income handles about 2,500 repair claims each month. Of these, 600 of our policyholders' claims saw their vehicles inspected at assessment centres. Another 850 claims from third parties claiming against our policyholders also saw their vehicles sent to the assessment centres.
We are able to bring down the average repair cost for each vehicle inspected at the assessment centres by about $500.
We wish to explain how NTUC Income manages the repairs at our quality workshops. The current scope of the assessment centres' work does not include stripping a damaged vehicle to assess internal damage. Assessors from the Independent Damage Assessment Centre (IDAC) are required to conduct only visual inspection of the damaged vehicle and to take note of the damage.
They will determine the scope of repairs based on the extent of the damage. They will also verify that damage is consistent with the accident, and prevent aggravation of the damage.
The workshop which is awarded the repair contract is obliged to repair the car according to the job scope predetermined by the IDAC assessor.
About 5 per cent of vehicles assessed have additional damage identified by workshops. Workshops can submit a list of supplementary items to be repaired or replaced to our surveyor, who will confirm the additional damage.
NTUC Income conducts post-repair inspection of vehicles to ensure that repairs are done in accordance with the job scope and that the quality of repair is of a high standard. We take our obligation to our customers seriously.
We conduct monthly surveys and our customers consistently give us a 95 per cent satisfaction rate on the repair done by our workshops.
Freddy Neo General Manager
General Insurance Division
NTUC Income
