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Wednesday, 08 January 2020 17:06

MSOs Hear Positive Outlook for 2020, Discuss Mixed Impact of Photo Estimating

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Allstate’s Clint Marlow predicted “big data” increasingly will help offset current limitations of photo estimating. Allstate’s Clint Marlow predicted “big data” increasingly will help offset current limitations of photo estimating. John Yoswick


A positive forecast for the collision repair industry in 2020 was among the presentations at the eighth annual “MSO Symposium” held in Las Vegas during SEMA.

Susanna Gotsch, director of industry analysis for CCC Information Services, said with new-car sales in 2019 again at $17 million units for the fifth year in a row (a first), and scrappage rates at historic lows, a growing vehicle population on the roads should mean “we will see the overall number of vehicles in accidents grow.”


Advanced driver assistance systems (ADAS) will likely continue to have a modest impact on that, she acknowledged. About 56 percent of 2019 model year vehicles include frontal crash warning with emergency braking (up from 29 percent for model year 2017), meaning an estimated 60 million vehicles on U.S. roads have that technology. That’s only about 20 percent of the total vehicle population, but a much higher percentage of vehicles that are 3-years-old or newer, which have previously accounted for a third of the estimates CCC processes.


Gotsch calculates if emergency braking cuts those vehicles’ likelihood of a front-to-rear collision by 50 percent, that technology is reducing overall frequency between 2 percent and 5 percent. There’s some potential offset; however, vehicles with emergency braking have a 20 percent higher frequency of being rear-ended by another vehicle when the emergency braking kicks in. That’s the upside for collision repairers during this period when there are still plenty of vehicles without much in the way of ADAS.


In the short run, she said, the industry can expect to see slightly fewer but more complex and expensive repairs.


“We expect repair costs to accelerate about 5 percent [in 2020] on average, versus about 3 percent growth two or three years ago,” she said.


As more driver assistance systems are introduced and work better in more situations, there should be more of an impact on frequency and severity, she said.


“Even if the vehicle doesn’t avoid the accident, [emergency braking] may at least minimally reduce the damage incurred if the speed of the vehicle is mitigated before impact,” she added.

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