Providing Assurance Needed by Carriers 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

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 9/17/2018

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 9/17/2018

Replacement Airbag Market: Challenges & Solutions 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 9/17/2018

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 P&C 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. 9/17/2018

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: 8~9 % of estimates Total out rate 2007: 19~20% 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 9/17/2018

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 9/17/2018

Airbag Resources.com Protocol is implemented through AR.com site; Training software Testing Inspection Reporting Restricted to ARA members 9/17/2018

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 9/17/2018

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 9/17/2018

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 9/17/2018

Airbag Resources/Training of Techs; log on 9/17/2018

Airbag Resources/Training of Techs 9/17/2018

Airbag Resources/Training of Techs 9/17/2018

Airbag Resources/Training of Techs 9/17/2018

Airbag Resources/Training of Techs; Success on test leads to award of Certified Airbag Technician (CAT) qualification for technician 9/17/2018

Airbag Resources/Training of Techs; Haz Mat Regs 9/17/2018

Airbag Resources/Training of Techs; Haz Mat personalized certificate 9/17/2018

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 9/17/2018

Inspection Program log on; CAT # required to log on 9/17/2018

Inspection Program; Data Entry 9/17/2018

Inspection Program; Data Entry 9/17/2018

Inspection Program; Checklist 9/17/2018

Inspection Program; Real Time Recall Check Tech clicks this button for real time Recall Check against federal (NHTSA) part recall database 9/17/2018

Certificate of Inspection; when all steps completed successfully 9/17/2018

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 9/17/2018