Auto insurers entered 2026 ready to grow again after years of turbulence, but structural forces keeping repair costs high and vehicle damage severe mean the recovery remains fragile, an industry analyst said during a webinar hosted by the Collision Industry Electronic Commerce Association on February 5.
"They were hungry for growth in 2026, but there were underlying trends that really worried them," Patrick Sullivan, senior editor and conference co-chair of Auto Insurance Report
The average cost to fix a vehicle nearly doubled over the past decade, rising to $4,768 by the third quarter of 2025 from about $2,500 in 2008, Sullivan said during the Feb. 5 webinar, titled "Navigating the Sea of Insurance Trends in 2026."
"That was a fundamental change in what it took to repair a car," he said.
After suffering what Sullivan called the worst underwriting year on record in 2022, insurers raised rates aggressively to stabilize results. By late 2024, most returned to profitability and stayed there through 2025.
"We were unable to find a year worse than 2022," Sullivan said. "You probably had to go back to the first time someone mispriced a Model T."
Large carriers raised prices by an average of 16.9 per cent in 2023, then slowed increases in 2025 once profitability returned. As rates flattened, competition returned and growth replaced pricing as the main lever.
Sullivan said vehicle design, not advanced driver assistance systems, drove the severity increase. Automakers focused on safety outcomes and features that helped sell cars, while repairability rarely factored in.
"Vision Zero really defined how OEMs approached vehicle design," he said. "They focused almost entirely on saving lives, very successfully, but that left blind spots around severity."
ADAS-equipped vehicles make up about one-third of the U.S. fleet and reduced claim frequency by roughly 33 per cent, largely by preventing low-severity crashes, Sullivan said.
But the technology offered limited protection against routine accidents or broader risks. Sullivan described watching a driver tear a side mirror off her car in a dim Chicago parking garage.
"No amount of technology was going to fix that," he said. "Once you add cameras and motors, that kind of mistake turns into thousands of dollars."
Climate-driven losses added further pressure.
"You can't ADAS your way out of a hailstorm," he said.
About 22.8 per cent of claims ended as total losses in 2025, the highest level on record, even as used vehicle values remained elevated. Consumers' continued shift from sedans to heavier SUVs and trucks increased crash energy and repair complexity.
Economic pressure further distorted the data. Higher deductibles and tighter household budgets led many drivers to pay out of pocket instead of filing claims.
"I don't think people were actually having fewer accidents," Sullivan said. "They just didn't want to file a claim."
Sullivan said drivers returned to the road after the pandemic without shedding risky habits picked up during lockdowns.
"When people came back on the road, they didn't change how they drove," he said. "They drove faster. They stayed distracted. They crashed harder than anyone expected."
By early 2026, insurers were profitable again but remained cautious as growth returned to the agenda.
"They might have been fat and happy," Sullivan said, "but they were still worried."
Sullivan is senior editor of Auto Insurance Report, published by Risk Information, and conference co-chair of the Auto Insurance Report National Conference. He began his insurance industry career at Risk Information in 2007 as a journalist and analyst, left in 2017 to work at insurtech Carpe Data and later at AAIS, a not-for-profit insurance advisory organization, and returned to Risk Information in 2021.
CIECA is a subscription-based organization based in Sanford, N.C., that develops data standards for the collision industry to facilitate electronic commerce between insurers, repairers, parts suppliers, vehicle manufacturers and software providers. The free webinar drew attendees from across the collision repair industry.
