‘Our relationship with insurers is very strong’ says Copart UK boss

The widely reported dip in motor claims, linked to the government’s national Covid-19 lockdown regime, has had a knock-on effect on those working in the salvage industry as part of insurers’ supply chain.

Jane Pocock, managing director at Copart UK, for example, says the firm’s workload is now one-quarter of its pre-coronavirus levels – the company is collecting around 650 cars a day as of May 2020, compared with between 2,000 and 2,500 daily collections prior to the coronavirus outbreak.

Despite this decline, Pocock has noted an increased interest in salvage as a result of the Covid-19 pandemic. This is primarily because of the transportation issues many repairers are experiencing in terms of sourcing parts.

She says: “We’ve seen a slight increase [compared with claims volumes] because insurers have decided not to repair everything they may have previously repaired. We were still quite surprised, when you look at how empty the roads are. To think that we can still be picking up 600, 700 cars a day just seems utterly crazy, but people are driving faster and some of the workers that are deemed essential would be driving around in potentially lower value cars, which automatically puts them into the total loss, uneconomic to repair ratios.

“In the first three weeks [of lockdown], we were collecting a lot more vehicles from recovery agents and body shops, where  insurers took a decision to salvage the vehicle rather than repair it.”

But, as prime minister Boris Johnson announced an easing of lockdown measures this May, Pocock is already seeing a return to normality as body shops re-open and insurer decisions again focus on repairs.

“Initially, when the government put [out] the instruction ‘you must absolutely stay at home’, most businesses that required people to be on-site to function just sent everybody home and closed down, for instance, the body shops and the parts suppliers. So things became very quiet for the first three weeks of lockdown, and now we’re seeing the body shops returning, opening some of their facilities and we’re seeing parts suppliers return to pretty much normal,” she says.

Organisational action

But how has Copart UK specifically responded to the coronavirus crisis?

For Pocock, being part of a worldwide, technologically driven company has been a huge advantage – Copart UK’s online global auction, for example, has gained greater popularity because of its digital sales process. Although cars sold at auction can no longer be collected at Copart’s yards, which have been closed to the public to adhere to social distancing, the company instead delivers the vehicles.

“The blessing of being part of a global company [is] that our business continuity plan had tested all environments, including our offices being unavailable. So we just invoked plans where our staff could work from home,” Pocock says.

Those staff remaining on-site are provided with personal protection equipment (PPE) and have plenty of space to maintain social distancing as well as move vehicles, which have to undergo a quarantine process on arrival.

A further string in the organisation’s bow is the “strong” relationship it has with insurers, Pocock adds.

“Our relationship with all the insurance companies we deal with is very strong. We’re very integrated into their supply chains and so we’ve had tremendous support from them,” Pocock continues. “At a time when a lot of things have slowed right down, we’ve been able to still provide good returns to them for their salvage values, because the upside is that our auction has been incredibly active as there are so many people sitting at home with not much else to do.

“As a whole, we’ve seen really great relations. We have to have keys and documents for cars and the insurers have had rotas in place to go to their offices to handle post in a bio-secure way and send the documents and keys to us – we’ve put in protocols that you wouldn’t normally have to worry about.

“We’ve been working closely with [insurers] and I think one or two have been less advanced with their technology in that they’ve had to have people working in offices, just on rotas and socially distanced, but I would say the larger ones have certainly been really well equipped to have organised home working.”

Behaviour change

Pocock predicts that, post-coronavirus, there will be a change in customer behaviour that will affect the motor market.

“There will be people that will have had their jobs affected by this, so they’re going to be out of work for a period of time, potentially remaining at home. There will be workers that will stay working from home because companies will work differently.

“Then there’ll be people that are not prepared to use public transport because they’re still at risk or feel vulnerable; they will genuinely change their travel habits. That will drive people more into cars that previously would have used public transport.

“The longer this lasts, the more permanent changes will come into effect.”