COVID-19 Ripple Effect on Auto Insurance Market
After months of sheltering in place, it should come as no surprise that claims volumes are down. COVID-19 has impacted markets around the globe, and has produced ripple effects in the auto insurance market that are influencing many aspects of the claims ecosystem—from the global supply chain to workflows to the car parc itself. So what does this mean for collision repair and the claims industry as a whole? Three early indicators have already emerged that could have a long-lasting impact.
The Realization of Claims Virtualization
Five years ago, if someone mentioned “claims virtualization,” it most likely referred to an insurance carrier’s mobile application, or possibly just conjured visions of VR goggles used for high-tech simulations. These days however, the idea of virtual claims handling, or as Lexis Nexis1 defines it, “photo or video estimating in which no insurance employee physically inspects the vehicle,” has firmly taken hold with touchpoints from First Notice of Loss to Total Loss and all points in between.
The Impact of Calibration Needs on Collision Repair
With the increasing ubiquity of Advanced Driver Assistance Systems (ADAS), comes the increasing need for systems to be properly calibrated to ensure proper functionality after a repair has taken place. In many instances, calibrations are required simply because there is damage in the general area of a particular component, even if it wasn’t directly impacted by the collision event.
Average Length of Rental for Repairable Vehicles: Q4 2019
Average Length of Rental (LOR) for Q4 2019 landed at 13.1 days in the United States, an increase of 0.4 days compared to Q4 2018. Once again, there was very little consistency between regions and states or with Q3’s numbers. The Southwest region produced the largest increase at 0.8 days with average LOR ranging from a high of 14.5 days in the Mountain region to a low of 11.7 in the Pacific. At the state level, Rhode Island, Colorado and Wyoming were the high-end outliers at 16.1, 15.7 and 14.9 days, respectively, while North Dakota and Iowa produced the lowest numbers with both at 10.5 days.
Market Trends Continue to Show Signs of Increasing Acceptance of Electrification
Electric Vehicle (EV) sales did not continue the fast-paced growth seen in 2018 with the release of Tesla’s Model 3, but expert and consumer sentiments are pointing toward a bright near-term future for this industry-disrupting segment. Deloitte’s recently released 2020 Global Automotive Consumer Study shows that of the US consumers surveyed, 41% would prefer an alternative energy (non-internal combustion engine or ICE) vehicle for their next purchase.1 This figure is up from 29% in 2019 and 20% in 2018.
Current Used Vehicle Market Conditions: Q4 2019
2019 ended with average wholesale prices dropping for the seventh month in a row. Though some of this decline reflects seasonal patterns, it may also be indicative of used vehicle market “fatigue” after many months of admirably withstanding used vehicle supply growth without significant deterioration in values.
Automation Glossary: Need-to-Know Terminology for Property & Casualty Claims Organizations and Collision Repair Facilities
Automating claims workflows have long been a central strategy for Property & Casualty (P&C) claims organizations and collision repair facilities seeking to efficiently and accurately process claims and manage repair complexity. In today’s dynamic environment, where each week seems to bring a new technology advancement, staying up-to-date on the latest automation technologies is key to understanding the future of the P&C industry.