2000

UNITED DEMOCRATIC MOVEMENT

MEDIA RELEASE


INSURERS PROMOTING UNEMPLOYMENT

MEDIA STATEMENT ISSUED BY TOMMY ABRAHAMS, MP
UDM SPOKESPERSON ON TRANSPORT

Short-term insurance giants like Santam and Auto and General are consciously or unconsciously opposing the efforts of Government to create employment.

Government has stated that the way to address the unemployment problem is via the creation and development of SMME's. Small and medium-sized panel-beating concerns are, however, facing closure and precious jobs are on the line.

The reason for this crisis is that insurers have adopted a "panel" system, which basically involves the short-listing of hand-picked businesses. Insured vehicle owners are coerced into having their vehicles repaired by service providers on the "panel", to the exclusion of all other businesses. By far the over-large majority of motor body repairers are in this way prejudged and condemned as deliverers of poor quality work.

By usurping the right of the insured vehicle owner to exercise a free choice of service provider, the insurers are further (probably inadvertently) increasing the potential for corruption all the way up the line. The upshot of it all is that the customer pays more than is necessary.

A group of panel-beaters has written Santam, calling on it to scrap the "panel" system and to free the trade, failing which they will proceed with a High Court action to serve an interdict to this effect

Meanwhile, complaints are being lodged with the Competitions Commission.

While these efforts are being made to ensure fair competition, vehicle owners themselves will help to save the jobs of thousands of employees by refusing to allow an insurer to dictate to them about the choice of vehicle body repairer.

Enquiries:
Tommy Abrahams, MP
UDM Spokesperson on Transport

Cape Town
25 August  2000