San Diego, California — December 13, 2013 — The new year will bring a shift in operational efficiency as new technology and resources improve processes, while increased new vehicle sales and favorable financing will drive down the value of used vehicles, according to industry predictions released by Mitchell. The predictions focus on the auto repair and body, insurance, claims and payer ecosystems.
â€œAs the amount of data rises throughout the property and casualty and collision repair industries, more organizations will find ways to leverage this information to improve operations and contain costs,â€ said Greg Horn, Vice President of Industry Relations for Mitchell. â€œThe rate of data coming in is too large and too fast to ignore, making technology and insights into business intelligence and predictive modeling a top priority for everyone.â€
The broad industry and specific predictions relate to the companyâ€™s core Auto Physical Damage, Auto Causality and Workersâ€™ Compensation divisions, including key collision-related predictions:
Predictive technologies will improve cycle time, outcomes and customer satisfaction – P&C payers will look to leverage the vast quantities of data to help improve operational efficiencies and reduce claim costs. The ability to easily integrate and access business intelligence and predictive models will be at the top of the priority list, with many P&C payers planning to upgrade outdated technology in 2014. Integrating business intelligence in existing applications and processes, such as bill review, will allow payers to gain insight and take action to automate workflow, measure provider performance and outcomes, and mitigate claims with the potential for high severity or narcotics abuse.
Triaging and predictive technologies will begin to deliver more demonstrable results as these resources mature and the industry harnesses the power of Big Data. As an example, by leveraging key models, insurers can more effectively identify cases with elements of fraud that can be transferred to Special Investigative Units.
Total loss claims will increase – Robust new vehicle sales will continue to cause used car values to soften. As our new vehicle sales volume is on record to exceed 16 million new sales (back to pre-recession levels), the value of used vehicles will suffer because of easy new vehicle finance terms. This, combined with a spike in lease return vehicles, will result in a higher percentage of claims resulting in total losses.
Recovering economy will spark higher labour rates – Retail hourly labour rates for both body labour as well as paint and materials costs will rise, as the cost of acquisition of qualified technicians and the paint and materials from suppliers rise. The recession helped delay increases in hourly labour rates charged by collision repair shops, but rising costs for materials, healthcare and other costs of business will force shops to raise hourly rates.