From the 1930s to the 1950s, accident “management” was focused on mechanical repairs (e.g., transmissions or glass) built around a series of regional repair networks. When an accident did occur, repairs were handled by the driver. It wasn’t until the 1960s and 1970s, with changes in the insurance landscape, that the need for formalized accident programs evolved.
Parallel to this was the growing focus on safety, symbolically kicked off in the 1970s when seatbelts and other safety items became increasingly required on U.S. automobiles.
The Birth of Accident Management
Accident management, as we know it today, was born in the mid- to late-1970s with the formation of SALEX Fleet Management, by Sal Crimi and Alex Gianopoulis.
SALEX’s concept was to remove the driver from the accident management process by providing a network of pre-screened shops, where estimates were written, reviewed by body technicians at SALEX, repairs authorized, and shops paid. It also innovated by taking the information to produce an accident report for the customer.
Bob Martines, CEO and president of CCM, was with SALEX in those early days and helped develop the company’s network of approved shops. “Key elements of the process of building the network were the transmission shops, with whom we had strong relationships,” he said. “They would introduce us to the collision shop owner/manager and help break down some barriers and fears of doing business with an out-of-town company. Keep in mind that in the 1970s, the concept of a network of repair shops was so out of the ordinary that it took months to actually get up and running.”
Frank Fitzpatrick of Fitzpatrick Bros. Body Shop of Boston was a key shop owner who assisted SALEX in building its network.
The Business Grows
CSC was another pioneering accident management company, according to Dan Shive, VP of risk management for LeasePlan USA and former CSC employee. Shive said consolidated billing made these early accident management programs particularly appealing to fleet managers.
But, it was another innovation — this one borrowed from the insurance industry — that was the watershed moment for accident management.
“Around 1980, Earl Miller came along and joined SALEX as a salesperson, and he showed SALEX how to get involved in subrogation recovery. It used to be just collision repair work. The first fleet client for subrogation was J.P. Stevens and Company,” said Wayne Smolda, CEO of CEI, which he founded in 1984. Coincidently, Smolda eventually hired Miller away from SALEX. CEI started a subrogation program soon after.
The focus on subrogation had important, positive implications for fleets and companies’ bottom lines, according to Jeff Fender, VP sales and marketing for Fleet Response. “The value-add with a centralized reporting process and the information you’re capturing from a loss notice helped our clients understand not just the cost of accidents, but the scope of accidents both in frequency and severity. They could pinpoint who is having accidents, why they are having accidents, and how much it was costing them. As this information became readily available, the next step was how to prevent it.”
Making Safety a Priority
The answer to preventing accidents was safety management, which gained a foothold starting in the 1980s and early 1990s.
According to CCM’s Martines, this drive for safety training stemmed, in part, from fear of litigation. “One of the driving forces of safety programs has been negligent entrustment. Companies fear the financial implications of lawsuits and look for ways to protect their image, their drivers, and ultimately their bottom lines,” he said.
Many safety programs began with pulling driver motor vehicle records (MVRs), which was a difficult process in the early days, according to Shive of LeasePlan. “In the 1980s, the first MVR services started to be offered. It was not an automated process — everything was paper,” he said.
Technology was a key component in making safety programs a reality. “Technology had a lot to do with making everything a lot more scalable and bringing a lot more value to the fleet customers,” Smolda of CEI said.
At the same time, driver training was becoming more commonplace with online training targeted to specific behaviors, according to Shive. There was also the emergence of 1-800-How’s-My-Driving-type programs. Looking ahead, technology, connectivity, and data integration will be the ongoing theme as the 21st century progresses, according to Smolda.
“I think it’s safe to say that we’re in as much the content management business as we are in the data management business right now,” he said. “I think where the industry is going is easier to use, faster, and cheaper, and I think because this is specialized business, it’s even more critical this is the case.”