Inspection

1
ARA Airbag Protocol Providing Assurance Needed by
Carriers

• Inspection Training System for OEM Non Deployed
  Airbags
• Implementing the ARA Protocol
• The International Standard for Replacement
  Airbag Modules
• New Options for P C Insurers

Presented at URG Pinnacle Training Conference ,
Englewood, CO 80112 March 24 2007
2
ARA Airbag Protocol

• Goal of Protocol
• Meet insurer expectations for standards
• Reduce total losses which hurt the sales of non
  airbag parts
• Boost members airbag sales to insurance paid
  collision repairs

3
ARA Airbag Protocol

• ARA Airbag Protocol offers the insurance
  collision industry assurances that
• The part has been handled by trained and
  certified technicians
• New qualification created Certified Airbag
  Technician (CAT)
• Standard work is practiced
• Part matching application by MMY and VIN
• Detailed examination of each part multi point
  inspection made
• Comprehensive records kept on each part inspected
• Certificate of Inspection for each part

4
Replacement Airbag Market Challenges Solutions

• Replacement airbag market
• Special circumstances in replacement airbag
  market
• No aftermarket airbag option available
• Monopolistic conditions exist as a result
• Carriers captive to new dealer airbag prices
• Book value of vehicles decline w/ age, but prices
  of new OEM airbags do not decline in sync w/ the
  value of the vehicle (as a rule)
• The older a vehicle is, the more likely new
  dealer bought bags will total the vehicle
• Carriers insuring older vehicles ( 5 yrs old)
  most exposed

5
Replacement Airbag Market Challenges Solutions

• Competition is required in airbag market to
  moderate prices (as with any other)
• Only alternative to new bags is non deployed OEM
  airbags from vehicle recyclers
• Carriers demanding compliance with written
  Standards from all vendors, incl. aftermarket
  parts suppliers, safety glass suppliers, wheels
  etc
• Airbags are the latest entry on the list of
  safety related auto parts for which adoption of
  written Standards precede mainstream use by PC
  Carriers
• Replacement safety glass well illustrates.
  Windshield glass both a safety item and key part
  of the airbag system. National standards adopted
  in replacement glass industry paved the way for
  non dealer installations and use of aftermarket
  glass alternative parts.

6
Replacement Airbag Market Challenges Solutions

• Rate of totals is growing, with direct impact on
  future growth rate of shops and recyclers alike
• Total out rate 1999 89 of estimates
• Total out rate 2007 1920 of estimates
  Data source CCC/insurers
• What are the main characteristics of a total loss
  vehicle in order of importance?
• Vehicle driveability
• Odometer reading
• Airbag deployment
• Source CCC , Crash Course 2007

7
Cost/Benefits

• Costs
• No cost to carrier to participate in program
• Pricing varies with model always at an
  attractive discount to dealer new pricing
• Benefits
• Reduce Materials Costs
• Save totals
• Risk Management
• No auto part is risk free
• ARA Protocol ensures best practices always used
• Ensures equivalent performance to OEM new
• ARAPro bags are 100 OEM parts
• Rigorous data retention on each part inspected
• Liability exposure managed through
• Do No Harm record every step taken
• Database on each part
• Inspection records
• Each member carries product liability insurance
• Informed consent, always policy holder
  explicitly authorizes carrier and shop to acquire
  and install unit

8
Airbag Resources.com

• Protocol is implemented through AR.com site
• Training software
• Testing
• Inspection
• Reporting
• Restricted to ARA members

9
Why develop Airbag Resources?

• Custom software turns the Airbag Protocol into a
  daily tool used in operations
• Consistent approach throughout the recycling
  industry
• Real time data collection and reporting
• Facilitates e-learning for techs
• Airbag training
• Training, testing, and certificates completed on
  line
• Safety
• Haz mat training, testing and certificates
  completed on line
• High quality work
• Part traceability
• Automatically screens parts for govt Recall
  campaigns
• Comprehensive database on all parts inspected
• Meets insurer expectations for Standards,
  training, inspection data retention

10
Using Airbag Resources Branding complying units,
ARAPro

• Inspected airbag inventory to be marked ARAPro
  in the comments notes fields in Pinnacle and
  Hollander
• ARAPro flows from inventory management systems
  to estimating systems operated by Hollander and
  Pinnacle, but, carriers have the option to
  disable non approved components in their user
  menus
• ARAPro soon to be available on Car Part .com

11
Airbag Resources/Training of Techs

• Technicians must be trained and certified before
  extracting, handling, inspecting or shipping
  airbags
• Tech take a test through Airbag Resources which
  grades their performance. Once acceptable level
  is reached employee is a Certified Airbag
  Technician (CAT)
• Non certified personnel not allowed to work with
  airbags

12
Airbag Resources/Training of Techs log on
13
Airbag Resources/Training of Techs
14
Airbag Resources/Training of Techs
15
Airbag Resources/Training of Techs
16
Airbag Resources/Training of Techs Success on
test leads to award of Certified Airbag
Technician (CAT) qualification for technician
17
Airbag Resources/Training of Techs Haz Mat Regs
18
Airbag Resources/Training of Techs Haz Mat
personalized certificate
19
Inspection Software

• Airbag Evaluation Management System
• Ensures standard approach to every airbag
  inspected
• Guides techs on to look for
• Requires confirmation at every point that parts
  meets requirements else cannot proceed
• Data gathered and stored in real time
• AEMS generates a file on every airbag inspected
• Reports may be generated at any time

20
Inspection Program log on CAT required to log
on
21
Inspection Program Data Entry
22
Inspection Program Data Entry
23
Inspection Program Checklist
24
Inspection Program Real Time Recall Check
Tech clicks this button for real time Recall
Check against federal (NHTSA) part recall database
25
Certificate of Inspection when all steps
completed successfully
26
Collaboration with Carriers

• Our Message to insurance carriers
• Reduce repair cost, while managing liability
• Liability managed using written Standards,
  Training, Database, Inspection Reports,Certified
  Technicians
• Create choice, improve competition
• Offer options to consumers where none existed
  before
• ARAPro bags suit some cases, (not all), e.g.
• Borderline total out repairs
• New OEM parts not available from dealer
• Customer always approves (informed consent)
• Body shop also approves and consents