fbpx

John Yoswick

John YoswickJohn Yoswick is a freelance automotive writer based in Portland, Oregon, who has been writing about the collision industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com).


He can be contacted at john@crashnetwork.com 

Tuesday, 05 April 2022 15:26

Collision Repair Industry Trend Data Shows Need for Changes to Insurer DRP Metrics

Written by

Index

Share This:

 

Collision repairers have for some time been saying changes they are seeing within their business point to a need for insurers to adjust their key performance indicators (KPIs) metrics for direct repair claims.

Recent industry data from CCC Intelligent Solutions support the trends shops are reporting.

 

Average repair costs, for example, rose 8% in 2021, about one percentage point higher than U.S. inflation overall; the average part cost across all part types---OEM and aftermarket---was also up 8% last year, the “largest annual increase we have seen” since CCC began reporting that data in 1997, according to CCC’s Susanna Gotsch.

 

“Moving forward, most analysts expect that we’ve seen most of the increase in parts costs that we are going to see,” Gotsch said. “We’re not likely to see part prices reverse substantially, but the largest increases that we experienced in 2021 are not likely to be repeated in 2022. Where most analysists are predicting [the industry] will see the most pressure in 2022 will be on wages.”

 

Average total labor hours per repairable non-comprehensive claim grew slowly from 2011 (23 hours per claim) through 2019 (23.9 hours), but then jumped to 24.7 hours in 2020, and to 25.8 hours last year. Gotsch said the pre-pandemic growth was related to vehicle complexity, but the larger increase in the last two years is based in part on the increase in the percentage of non-drivable claims.

 

Compared to 2019, there was more than a full percentage point jump in DRP claims with repair costs above $10,000 in 2021, and a 2.5 percentage point jump in claims between $5,000 and $10,000. That results in longer cycle times, Gotsch said.

 

“For each $1,000 increment, we essentially see an additional two full days in the overall repair time, or keys to keys time,” she said. “Industry wide, DRP repairs are now taking over 12 days, two full days above where they were in 2020, and a little less than two full days longer than they were in 2019. By the time we get to a $10,000 or higher repair, the average repair time exceeds 35 days.

 

"Subsequently, we hear more carriers saying their customers are running out of allocated rental days, and many carriers have said...


Previous Page Continue reading »