Hi Mr Wyndham,Yes most large repairers do work off fixed...

Hi Mr Wyndham,

Yes most large repairers do work off fixed pricing. I stress large, as volume is the only way this model works. It also requires a constant CPI or greater adjustment to the rate.

This hasn't happened in the past & it has created a reduced profits for repairers who work with this model or I should say a reduced margin of profit as insurers just tend to funnel more work to make up the short fall. However as you can see by AMA's announcement, they have reached new pricing agreement with Suncorp. They are also in the process of new arrangements with IAG. This is what AMA have been pushing for sometime & conditions are perfect now for this to be realised.

IAG has only just announced today that they are suspending the fixed price model until further notice. Not All AMA shops work on small to medium repairs either.

Yes with the slowdown this will hurt those large repairers like AMA, but it will hurt the smaller ones without the agreements even more, because the crumbs they once relied on are being snapped up by the larger repairers to fill the gaps.

Small metro repairers particularly are falling over at an alarming rate right now. The major insurers can do very little to help individual repairers get through this crisis as every circumstance is different, but they are in a much better position to renegotiate terms with a major company like AMA to sure up their supply network.

AMA will be well positioned coming out of this to take advantage of the shortfall in the repair network that has now been created. Keep your eye out for further announcements from this company regarding new pricing arrangements in the next few months.