In CCC Information System’s 2009 edition of Crash Course, the company predicts an increase in repair costs coupled with decreased vehicle values will contribute to more total losses in the coming year.
In 2008, the auto-physical damage industry saw change due to a global recession and harsh weather. These factors had a major downstream impact on things like erratic fuel pricing and overall driving habits, helping create a “Perfect Storm in 2009,” CCC says. In this year’s Crash Course, CCC Lead Analyst Susanna Gotsch examines the events of 2008 that were catalysts for change in the industry and the impact they may have in 2009.
“All of the information we’ve gathered indicates that insurers and repairers will certainly be impacted by the economy’s current recession,” said Gotsch. “Some of the contending factors include lower premiums – an aging vehicle fleet potentially leading to more total losses – and greater industry competition.”
Gotsch highlights opportunities for companies that can adapt and learn how to change their business models in order to pull ahead of those that simply pull back and wait until growth makes a comeback. In addition, research shows that an evolving consumer demographic is increasingly sensitive to factors such as price and customer service.
“Companies will need to be even more aware of variances among their customer base by age, demographics, employment situation and geography than potentially ever before,” added Gotsch. “Using this information to change and grow their business will help companies in this very difficult economic environment.”
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