In the latest installment of the annual Power 300 issue of AuSM, we go behind the scenes with some of the leading companies in the used-car space and their top executives with a few Q&A features.
Next up in this series is John Kett, chief executive officer and president of Insurance Auto Auctions. The emailed Q&A is below:
AuSM: A lot of talk this year about off-lease and wholesale volume this year. What’s the volume picture looking like on the salvage side of the business?
John Kett: Salvage industry volumes, which have grown at a double-digit rate recently, are driven by a combination of accident frequency and severity of damage. These aggressive growth volumes have been largely driven by rising miles driven, an average older vehicle on the road, increasing driver distractions and higher repair rates, which all result in insurance companies totaling more vehicles versus repairing them.
AR: Good bit of expansion this year for Insurance Auto Auctions. What is driving that need/demand for additional IAA locations?
JK: IAA has maintained a consistent and aggressive growth strategy by expanding or opening over 25 IAA facilities and increasing capacity by over 20 percent since 2016. Our strategy for expansion focuses on where it makes business sense and benefits our vehicle buyers and sellers. In addition, at the same time, we focus on expansion, we focus on the efficiency of our auction model. We know that our customers benefit greatly from innovation that makes the auction platform more efficient. Therefore, we invest heavily in technology that will support the best economic value to the buyer and seller.
AR: I understand that tech-related launches have played a big part of Insurance Auto Auctions’ strategy this year. What are some of those launches you’re particularly proud of?
JK: I’m most proud of how we lead the industry in developing technology to add tremendous value to our customers. We utilize our customers’ back and needs to drive the design of our products and services. Recently, we launched two products for our buyers, IAA Fast Search and IAA Enhanced Vehicle Details. Both products are examples of innovation aimed improving the shopping, bidding and buyer experience at IAA. Buyers have told us they want to be able to make fast and informed buying decisions. Both of these products enable buying customers to maximize their search time and more efficiently identify those vehicles on which they may want to bid.
John Kett, Insurance Auto Auctions
AR: Looking at first-quarter results reported in May, I see that Insurance Auto Auctions’ revenue grew from $269.6 million to $297.4 million for the quarter. What is driving that kind of growth?
JK: We were very pleased with our results. IAA is a strong business and being part of the KAR Auction Services family of companies only strengthens what we deliver to the market today and beyond. Higher total loss volumes and increased vehicles offered for sale were the primary drivers of our double-digit volume growth and revenue growth in the first quarter.