Suncorp picks car parts
Having already tried investing in its own repair shops, the insurance giant on Wednesday announced a joint venture with the US-listed LKQ Corp to supply new and second-hand car parts.
Mr Snowball, Suncorp's chief executive, said it was too early to put a value on the savings, but the move should lower costs.
"We pay $500 million a year for motor vehicle parts, some of that attracting mark-ups of 400 per cent or more," he said. "If you bought all the parts for a $21,000 car, it would cost you $114,000, an increase of 543 per cent."
It comes after a separate joint venture that has resulted in Suncorp having a stake in 23 smash repair shops, which it claims are driving down costs and improving service. But it is still losing share in motor insurance to Coles and Woolworths.
Revenue from car insurance premiums rose by 4.2 per cent to $2.5 billion in Australia in the financial year, but analysts quizzed Mr Snowball about the business losing 2 per cent market share in the past two years.
Frequently Asked Questions about this Article…
Suncorp announced a joint venture with US-listed LKQ Corp to supply new and second-hand car parts as part of a cost-cutting drive led by CEO Patrick Snowball.
Suncorp says the move should lower costs for its motor claims operation — the company pays about $500 million a year for motor vehicle parts and wants to reduce high supplier mark-ups.
Suncorp highlighted that some parts attract mark-ups of 400 per cent or more, and gave an example saying parts for a $21,000 car could cost $114,000 — an increase the article cites as 543 per cent.
Yes. A separate joint venture has given Suncorp a stake in 23 smash repair shops, which the company says are helping to drive down costs and improve service.
According to CEO Patrick Snowball, it’s too early to put a value on the savings, but the joint venture should lower costs—whether and when that flows through to customer premiums was not specified.
Despite revenue growth, Suncorp is still losing market share in motor insurance to competitors such as Coles and Woolworths; analysts noted the business has lost about 2 per cent market share over the past two years.
Revenue from car insurance premiums in Australia rose by 4.2 per cent to $2.5 billion in the financial year covered in the article.
The article references Suncorp, its CEO Patrick Snowball, US-listed LKQ Corp (the joint venture partner), and competitors Coles and Woolworths in the context of motor insurance market share.
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