CCC Crash Course Industry Report Predicts Little to No Increase in Claims Over Next Decade - BodyShop Business

CCC Crash Course Industry Report Predicts Little to No Increase in Claims Over Next Decade

Fewer shops, more total losses, declining claim frequency and increasing vehicle complexity are just some of the trends predicted by the 2010 edition of CCC Information Services Inc.’s CCC Crash Course industry report titled, “The Convergence of People, Economy and Technology.”

“The last decade has seen dramatic change in the automotive collision repair and insurance industries,” said CCC Lead Analyst Susanna Gotsch. “The recession that threw global economic growth in dramatic reverse at the close of the decade put many of the trends impacting the industry over the last 10 years into overdrive.”

The report analyzed the previous decade to see what might be in store for the next decade. It noted that claim frequency declined over the past decade and doesn’t expect it to make much of a rebound over the next 10 years, even if the unemployment rate goes down and, as a consequence, miles driven goes up.

“Despite the potential for rising employment numbers to increase miles driven, the fact that claim frequency was declining early in the last decade while miles driven were still increasing, suggests the industry will not see much if any increase in claim frequency in the coming decade,” said Gotsch.

The report also predicts continued aging of the vehicle fleet, with new car sales only expected to hit 12 million in 2010, far from their peak of 17 million in 2000. This indicates that increasing total losses are on the horizon.

“The combination of the age of a vehicle and its value is directly related,” Gotsch said. “If the age goes up, the value goes down, which means you could it [total loss] thresholds faster.”

In the report, Gotsch predicts that collision shops will have to become more specialized, invest heavily in training and put extreme focus on customer service to compete in the next decade. Also, she sees a trend that may affect car dealers and, in turn, affect body shops too.

“Look at the Toyota recall and how the press is focusing on the electronics in the car,” Gotsch said. “Sophisticated electronics will continue to be married in vehicles but there will be more of a requirement to track those electronics, and so customers will have a greater link to dealers, and I wonder if that will pose some interesting dynamics with collision shops. Will there be more synergies between dealers and collision shops, and will shops take advantage of them?”

The report is rife with interesting statistics, including:
 
• Number of shops dropped 10 percent over last decade, from 48,000 to 41,500

• Percent of vehicles for which an appraisal was written that were flagged total losses went from 9 percent in 2000 to 14 percent to 2009

• Percent of vehicle claims written for vehicles seven years old and older went from 30 percent in 2000 to 38 percent in 2009

• Average total cost of repair for vehicle appraisals in 2009 was $2,409, down 2 percent from 2008 – the first actual drop in repair costs year-over-year in the last decade

• A comparison of average hourly labor rates for the last five years shows a steady rate of 2 percent each calendar year for all categories of labor


More information:

• Access the full Crash Course report

CCC

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