Australian insurance giants accused of sidelining NZ panelbeaters

Friday, 12 June 2026

The panelbeater industry says it is being hammered as Australian insurance giants build corporate repair factories that are taking away work from independent businesses.

Some panelbeaters are closing up shop, unable to compete with state-of-the-art mega repair workshops owned by two giant insurance groups ‒ IAG and Australian-based Suncorp Group, which owns Vero Insurance, and in turn is in partnership with AA Insurance.

Panelbeaters spoken to would not be named out fear of being cut off by the insurance companies through a “do not allocate” work order on their computer systems. But they speak of insurers coaxing owners of damaged vehicles to use their factories rather than a local panelbeater.

“Traditionally the role of a panelbeater has been to work for the customer and to build a case for the repair on the vehicle to get it back to the manufacturer specification. And we're fighting the insurance company, who is also our customer,” one panelbeater said.

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Previously there was a demarcation between the panelbeater and the insurer to make sure a vehicle was fixed correctly, the business owner said.

But in some areas where IAG had opened a repair centre, all work had been taken away from independent panelbeaters, forcing vehicle owners to use its workshops.

Similarly AA Insurance had brought in Australian repair company Drive Group to do that work.

Stewart Gibb is the general manager of the Collision Repair Association, to which independent panelbeaters belong. He said the industry was continuing to change rapidly and consolidate.

That was in part due to owners of independent repair shops reaching retirement age and either selling up, or closing their business, Gibb said. As a result the number of repairers was reducing. Some were struggling to keep up with the rapidly changing technology and the skills needed to do the job.

But, he said, a big change in the industry had been insurance companies setting up their own hi-tech repair factories in the main centres. An example of that was the country’s largest insurer, IAG, which owns the NZI, AMI, State and Lantern brands, with a market share of about 60%.

IAG had built 10 specialist repair facilities under its AMI insurance brand, called MotorHubs, displacing the repairers who previously carried out the work for the insurer. IAG plans to expand the model to other cities, Gibb said.

“So where we used to have five or six repairers in that area that would supply, or do IAG work, now IAG is sending it to their own shops.”

The bread and butter work for panelbeaters is the fender-bender market, after drivers have had minor accidents. That was the work the insurance companies had taken in-house while sending the more difficult, less profitable, repairs to private workshops, Gibb said.

He said there was an anti-competitive concern, because typically when a market has a dominant player, they steer customers away from independent repair shops to its own facilities. “So there's all that cut and thrust happening.”

The organisation had previously raised its concerns with the Commerce Commission against IAG, but did not take matter further. Some panelbeaters have also taken their cases to the commission, with some still pending, Gibb said.

IAG’s competitor Suncorp, which owns Vero and in turn 68% of AA Insurance, makes up the other half of the insurance duopoly with about 25% of the market.

It had taken a slightly different approach, bringing in Australian repairer Drive Group, which had opened two repair sites in Christchurch and one in Hamilton, with two more to come in Auckland and several more planned over the next year.

Gibb said AA Insurance sent all damaged vehicles to Drive Group for repair in those cities, “and the local repairers miss out”.

“So with those two dominant players in the market taking control of their own repairs in the major centres, that's had a really massive effect in Auckland, Hamilton, Christchurch, and Wellington, which is accelerating, in some cases, people shutting their doors, or trying to get out.

“If you had an IAG contract and an AA contract, and you've lost it, then there's a very large chunk of your business that you no longer have, and the response by members to that is to reconsider their model,” he says.

AA Insurance chief operating officer Simon Hobbs said its partnership with Drive Group was about strengthening overall repair capacity and reducing repair bottlenecks. “It is not about replacing independent repairers, who remain a valued and important part of our broader repair network.”

Growth in the number of vehicles insured and the complexity of repairs required specialised equipment, technical expertise and manufacturer-approved repair capability, Hobbs said. But independent repairers continued to carry out the majority of its repairs.

IAG hub services executive general manager Dean MacGregor said the AMI MotorHubs were a response to customer demand for faster repairs and consistent quality.

The hubs offered modern equipment, streamlined processes and quality controls and were designed to complement the wider panel and repair industry.

“The repair industry continues to evolve globally due to a number of factors, including increasingly complex vehicle technology, skills shortages, supply chain challenges, investment requirements for modern repair equipment, and changing customer expectations.”

In the regions — where the factory model did not work — franchise operators were buying up repair shops and bringing them under a brand, with new management and investment in technology to suit the changing face of the industry, Gibbs said.

Others had diversified by adding repairs for jet skis or boats to their business, using the same equipment and skills that applied to repairing cars.

The industry had also changed organically with the adoption of new technologies and skills, he said. The latest vehicles are micro processors on wheels, with sensors or even computer processors embedded in the bodywork that can no longer be beaten out.

That was a concern because a new car with a five-star safety rating that had been in a minor fender-bender may not come out of a repair shop at its original safety rating because sensors may not work any more. “It could be far from that. So there's a lot of things that are happening very quickly that are also changing the market.

Gibb was calling for a registration process for repairers that work on hi-tech vehicles, similar to a plumber or an electrician, to ensure they had the skills to reset safety systems and calibrate sensors incorrectly, without which “your five-star safety rating is worthless”.