Allstate®
You’re in good hands
Carla Holmes
Manager, National Glass Program
This letter is written to Allstate Glass Claim Express (GCE) participants, and is intended to communicate certain auto glass industry pricing changes that NAGS (National Auto Glass Specifications) has announced will take effect on February 28, 2005. The NAGS database is commonly used by retail auto glass industry participants as the basis for retail pricing for their respective auto replacement glass products and services.
More than a year ago, NAGS communicated its intent to substantially revise its automotive replacement glass parts and price database. This initiative is referred to by NAGS as the “Rebalancing” of pricing. Effective February 28, 2005, the NAGS list price for automotive glass parts will be reduced, on average, by 65%. NOTE: The price changes referenced here affect only auto glass replacement claims: Allstate’s pricing for windshield repair claims remains in effect and is unchanged at this time.
Allstate neither supports nor opposes this initiative on the part of NAGS. However, in the interest of continuing to conduct business with glass service providers on terms that are common across the industry, Allstate has made a number of changes to its standard pricing agreement with GCE service providers as of February 28, 2005 (the effective date of the new NAGS list price). The two primary objectives are:
1. To the greatest extent possible, make the transition to the new NAGS a revenue-neutral event for Glass Service Providers and a cost-neutral event for Allstate and its insured customers; and
2. Assist in the transition to the new NAGS by providing timely communications and information to GCE Glass Service Providers.
Methodology
To re-structure the Allstate Glass Claim Express offer in response to the February 28 NAGS change, and to do so according to the two primary objectives mentioned above, we have utilized actual 2004 Allstate claim history in each pricing territory to arrive at an average replacement cost by pricing territory. By starting with the actual net average claim amount in each pricing territory, then applying the variable hours (average 2.5 hours per job), maintaining a fixed amount for kits per installation where applicable, we determined the remaining glass dollars per job and calculated a factor relative to the NAGS list. In rural pricing territories (C & D), given the drastic reduction in list price and an increased payment for services (labor), this will result in a “list-plus” level of pricing in order to maintain an equal net compensation under the new structure.
The new GCE offer is summarized below.
Territory A / Territory B / Territory C / Territory DCurrent Program Glass Parts Factor / -66% / -66% / -59% / -52%
Current Program Labor (Flat) / $39 / $39 / $39 / $39
Current Program Kit / $21 / $21 / $21 / $21
New Program Glass Parts Factor / -17% / -17% / +4% / +27%
New Labor Amount Per NAGS Hour / $35 / $35 / $35 / $35
New Flat Kit per claim / $22 / $22 / $22 / $22
Please make note of the following:
1. Hourly labor calculations
a. Allstate will utilize the installation service times that are included in the NAGS data as the basis for determining the labor amount that will be paid on any individual replacement job. If the NAGS database indicates that 1 hour is the correct time, Allstate will pay $35 for labor in that instance. I the job is more complex, and NAGS indicates that 4 hours are required to complete the installation, then $140 (4 x $35) is the amount that will be paid as labor. Please make certain that your invoices reflect the correct labor amount based on the number of NAGS-specified labor hours times the $35 per hour labor rate.
b. Invoices will be audited for labor amount using the NAGS specified labor hours data as the basis for the audit. If the amount charged for labor is greater than $35 times the NAGS-specified number of hours for that particular part, the invoice will be paid according to the correct number of NAGS-specified labor hours time $35.
c. Please note that, according to NAGS, certain jobs may require two people to remove and/or place certain windshields. In instances where two people may be required, the number of NAGS hours for that installation already accounts for the two people. NAGS also indicates that its time studies include time for prep and clean up for all jobs, so these functions are already factored into the NAGS labor hours for each part.
2. Invoicing for jobs reported and dispatched prior to February 28
a. Jobs dispatched (assigned to you by LYNX Services) through February 27, 2005 will be paid according to the current (pre-February 28) pricing methodology. Please make sure to invoice according to your conventional methods for jobs dispatched prior to February 28, even if the work is performed on or after February 28.
3. Kit pricing
a. Flat kit pricing will continue to be utilized for the new NAGS scenario, although the amount of the flat kit pricing has been revised. Please note this for your billing purposes. High Modulus and/or Non-Conductive kits will continue to be paid at a $10 premium over the standard kit allowance when applicable as noted on the work assignment.
4. Customized Offers
a. Many Allstate GCE participants have utilized Customized Offers to enhance their GCE participation. The Customized Offers technology will continue to function under the new Rebalanced NAGS scenario.
b. LYNX Services will conduct individual analysis for all Customize Offers participants, make the necessary revisions in the Customized Offers for all participating GCE participants to be effective February 28, and communicate the new methodology to ensure understanding.
5. Pre-Authorizations for Non-NAGS parts and/or labor
a. When a part is required for which there is no effective NAGS list price, the usual pre-authorization must be obtained from LYNX Services before the work is performed. Pre-Authorization will also be required should there be no effective NAGS labor hours.
b. LYNX Services is currently reviewing all pre-authorization procedures in light of the NAGS Rebalancing and the subsequent changes to glass program pricing.
The new Allstate Glass Claim Express pricing elements are contained in the attached Amendment entitled, “Allstate Glass Service Provider Agreement: Program Pricing Addendum”.
Questions regarding work orde4r, pricing profiles and EDI invoice generation should be directed to your point of sale provider.
All other questions regarding the NAGS Rebalancing can be directed to LYNX Services.
· Email (preferred)—
· Contact Us at http://www.lynxservices.com/- Please direct comments to Participant Services.
A reply e-mail will be sent within 48 hours. Answers to Frequently Asked Questions will be posted to the Installer Resources home page of the LYNX Services website at https://www.lynxservices.com/installers1/installers.asp.
· Telephone Help Desk for NAGS Rebalancing Questions Only
800-774-0422
· For al other GCE program participation questions call 239-479-6000, press 3, and then 6, for an available representative or to leave a message.
Calls will be returned in the order received based on available staff and the number of messages.
Please note: If your company has a Customized Offer in effect for Allstate, an additional communication will be distributed in the near future providing information specific to Customized Offers.
NAGS has initiated new elements in pricing as reflected herein and we acknowledge that there may be certain adjustments over time to the pricing structure. We anticipate that GCE participant companies can transition effectively into the new Rebalanced NAGS pricing methodology. It is our hope that these changes will maintain a healthy marketplace that will benefit consumers.
We acknowledge and thank you for recently completing your Recertification of participation and commitment to the terms of the Allstate Glass Service Provider Agreement. We look forward to your continued participation in the Allstate Glass Claim Express program.
Allstate assumes that your receipt of this letter and the enclosed Amendment to the GCE Agreement constitutes your acceptance of the GCE Amendment and your agreement to continue working with LYNX Services.
Thank you for your attention and continued participation.
Allstate Glass Service Provider Agreement:
Program Pricing Addendum
Effective February 28, 2005
Whereas, NAGS has announced that it is moving forward with the rebalancing of the winter U.S. benchmark price list; this addendum (“Addendum”) applies to participating, Glass Service Providers (“GSP”) of the Allstate Glass Service Provider Agreement (“Agreement”).
Revised:
1. Allstate offers and the GSP accepts the following prices for automotive glass service(s).
Pricing is determined by applying discounts (OFF) or markup (ABOVE) and labor rate to the National Glass Specifications (NAGS) Company published price list and labor hours or alternative(s) in effect on the date of the job dispatch. When NAGS prices and/or labor rates are unavailable or unpublished for a required part, a GSP is required to call the PA for part and/or labor pricing authorization. These methods of price determination become a standard pricing structure for this Agreement.
A. Glass/Labor
Current, applicable glass list price percentages and labor allowances are posted on the PA’s website at:
https://www.lynxservices.com/installers1/installers.asp
Customers are defined as Allstate, its employees, agents, policyholders, claimants, assigns, fleet or commercial insureds, related auto body repair facilities, or retail customers representing themselves as insured with Allstate. Work is defined as, but not limited to, glass repairs, replacements, and related functions performed for Customers. Terms of this agreement shall apply to all Allstate Work.
The GSP retail location address on file with the PA in closest proximity to the policy holder and the associated territory are used to determine the pricing offered under this agreement for Work defined under this agreement.
B. Installation Materials
Current, installation materials allowances are posted on the PA’s website at:
https://www.lynxservices.com/installers1/installers.asp
The posted amount applies to all types and quantities of adhesive system products, primers, cleaners, clips, lubricants, etc and license/inspection sticker replacement. The above amount will be paid for each adhesive set windshield or back glass replacement service when so indicated by the NAGS calculator, the GSP is to determine the proper use of the type and quantity of installation materials required to comply with applicable Federal Motor Vehicle Safety Standards for motor vehicle repairs and to retain original performance characteristics of the vehicle’s glass systems.
In accordance with the Agreement, section II. EE, this Addendum is accepted until WRITTEN rejection of the Agreement is provided by the GSP and received by the PA.