Motor repairs
Using undamaged, reclaimed and recycled vehicle parts from end-of-life vehicles is one of the promising solutions for sustainable insurance claims fulfilment. Recent research revealed that almost 70% of motorists would want their vehicle to be repaired with green parts in order to protect the environment. Although still perceived by some as unreliable or inferior (6%), the opposite is true. All second-hand parts must meet strict safety standards, be produced by original equipment manufacturers and be sourced from similar vehicles. Commonly reused major car parts include, for example, engines, radiators and gearboxes as well as key structural panels, doors and lighting units. However, a number of insurers who have embraced a green parts strategy have seen significant benefits and impacts from a reduction in the number of small, ancillary parts (bespoke nuts, bolts, washers, clips, connectors, badges and trims) which make up the largest volume of a usual motor repair parts basket. These parts, whilst generally low in individual cost, can make up the bulk of the typical parts basket although a small percentage of the overall cost.
The environmental benefits deriving from using recycled parts in motor repairs are significant, nonetheless, British insurers use green parts for only 2.3% of their motor repairs on average (please see the chart below). Another research discovered that around 400 thousand vehicle parts could be spared from going to the landfill every year, simply by using 10% more green car parts – and that is only in the UK. Consequently, manufacturing of new parts would decrease, reducing CO2 emissions by almost 200 thousand tonnes. Recycled car parts already save 80 billion barrels of oil annually, mainly in transportation and production. This way, progress towards a circular economy can be achieved.
Automotive paint alternatives
Apart from recycling vehicle parts, auto body repairs involve other processes which can be quite easily shifted to become more sustainable, such as paint refinishing – repainting affected areas or even the whole vehicle. In auto body shops, up to 100% of total VOC emissions and more than 50% of energy consumption can be attributed to painting processes. VOCs, or volatile organic compounds, are major air pollutants that contribute to the creation of smog. These chemicals are contained within traditional solvent-based paints to thin the substance. There are a couple of measures that can be taken in order to reduce the environmental impact of these paints, such as using a paint booth with intelligent air conditioning or high-volume low-pressure painting method which decreases the amount of overspray, thus, the amount of waste and pollutants.
Recently, however, a more green alternative to solvent-borne paints has been emerging, i.e. water-based paints. They are significantly kinder to the environment as they comprise almost 80% water and considerably less solvent. In addition, it was found that water-borne paints are superior to the traditional ones in numerous ways: from greater quality and durability to better colour matching and quicker drying. They also do not require as many coats and a blending machine which can result in less waste and even some financial savings. Procurato would encourage insurers to engage swiftly with their repair providers and ancillary parts suppliers and ensure that every tender or negotiation puts additional emphasis on suppliers who have increased environmental strategies. In addition to the obvious potential CSR and commercial benefits, we believe it is part of a robust risk management supply chain strategy.
Related reading
The call in this article to engage repair providers and parts suppliers on environmental criteria through every tender and negotiation is well placed, but it sits against a backdrop of significant cost pressure across the motor repair supply chain. Labour shortages, parts inflation, and constrained bodyshop capacity have made supplier conversations more complex, not less, over the past two years. Our analysis of motor claims inflation and its structural cost drivers sets out the full picture of what motor insurers are navigating across their repair supply chains, and provides useful context for understanding why building sustainability requirements into supplier contracts requires both commercial confidence and a clear view of where your current supply chain stands.
How Procurato can help
Translating the recommendations in this article into supplier agreements that actually deliver on green parts and paint commitments requires a structured sourcing process with the right commercial levers in place. Our Insurance Claims Sourcing service manages exactly that: designing and running competitive tender processes for motor repair and parts supply, building sustainability and environmental performance requirements into evaluation criteria and contract terms, and ensuring that the commercial outcomes reflect both cost and ESG objectives. If you want to move beyond aspiration and put these commitments into your supplier contracts, we are happy to talk through how that process would work.
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