Zurich Insurance has dropped a mandatory requirement for its 260 approved repairers to be members of the Motor Vehicle Repairers Association after the trade body lost its association status. At roadshow meetings detailing its new work contract, the insurer told bodyshops it intends to use the MVRA to monitor standards across the approved network but they would no longer be required to pay £1500 for membership of the trade body.

Zurich says it also plans to reduce the referral fee per job from £7.50 to £7. Experts say the action could cost the MVRA up to £400,000 in lost membership subscriptions.

“There seems to be little reason why any Zurich-approved bodyshop would need to join the MVRA, though many probably still will, in the short term at least,” says bodyshop consultant Robert Hadfield. “The MVRA will now have to survive on the skills of selling its member services.”

Zurich's revised approved repair contract improves the net labour rate for bodyshops by dropping the eight per cent bottom line discount that was added to each job. Parts discounts now fall into three bands depending on the markdown the repairer gets from the dealer. Each bodyshop will be given exclusive territories based on postcodes and an idea of the potential volume it can expect to receive to help with business planning.

A source who attended one of the meetings says the contract is virtually a re-run of the Cornhill agreement announced last year. But he adds repairers were generally receptive to the new terms. “It is moving the industry forward in the right direction,” he says. Meanwhile, the MVRA, in what appears to be a damage limitation exercise, has issued a press release claiming that a poll on Autorepairer.com, an accident repairer website, shows it to be the most popular 'trade association'.

The poll, however, was carried out in June 2001 and contradicts the findings of more comprehensive reports like the Sewells Bodyshop Opinion Survey.