Mitchell Makes Predictions for Collision Repair Industry in 2013 - BodyShop Business

Mitchell Makes Predictions for Collision Repair Industry in 2013

Forecasts decrease in recycled parts prices and increases in average cost to repair collision damage and average hourly labor rate.

Mitchell International has released some of its predictions for the collision repair industry for 2013, and they include a decrease in recycled parts prices and increases in average cost to repair collision damage and average hourly labor rate.

Mitchell believes there will be a softening of salvage vehicle values globally in 2013.

the European debt crisis continues to outpace our own, the euro will
further soften against the U.S. dollar. This will make it more expensive
for Europeans to purchase U.S.-based salvage vehicles, reducing demand," Mitchell says.
"An additional factor impacting salvage values is the increase in the
annual rate of new car sales, expected to hit 15 million for 2012.
Combining these factors with the 250,000 total loss vehicles expected
out of Hurricane Sandy will depress salvage car values in 2013. For
consumers, this means that there will be an increase in the availability
of recycled parts for vehicle repairs at a lower cost."

Mitchell also believes the average industry cost to repair auto collision damage will increase due in part to the softening of salvage values (putting more
borderline vehicles in the "repairable" column rather than "total loss" column)
and an overall inflation of labor, parts and paint.

"This will
also occur from an increase in the cost of raw materials (such as paint
mica and chemicals), as well as plastics and steel prices. In addition,
we expect to see an increase in average hourly body shop labor charges
if the economy continues to recover in 2013," said Mitchell.

Mitchell also made predictions for workers’ compensation and the auto casualty world, including:

More attention will be given to leveraging complex data sets. The
ability to incorporate data from multiple sources, such as different
areas of a business or business lines, and combine them with external
data sources to enable more intelligent decision-making will become
central to business operations. In addition to addressing the
complexities of big data (e.g. volume, velocity and data management),
companies will explore how to incorporate ancillary sources and more
sophisticated combinations of data sets to get an edge on the

The demand for cloud computing will increase. In 2012, adoption
of cloud platforms and services continued to increase along with
interest in a single environment and partner for cloud computing
technologies. In 2013, insurance carriers will begin to consolidate
cloud computing vendors and realize the benefits of working with a
single provider, such as streamlined and accelerated deployment of new
offerings, reduced operational costs, and improved data exchange and
information sharing.

"In today’s fast-paced, competitive business landscape, there is
increased pressure on the insurance industry to think creatively about
the services they offer and how those services are delivered to maintain
a competitive edge," said Erez Nir, CTO at Mitchell. "Cloud computing
strategies have been popular in the IT-focused environment. We have
embraced cloud computing at Mitchell, in the way we deliver
software-as-a-service to our customers as well as in how we consume our
own business systems. Beyond the core competencies our industry has, in
part due to the complexity and change 2013 will bring, we expect the
industry to continue to deploy various cloud and big data strategies to
help overcome business and technology challenges."

There will be a rise in healthcare ePayment solutions. More
carriers will use ePayment systems to gain a competitive advantage. They
will work with the provider community to be better aligned with changes
in healthcare regulation that promote eBill, eRemittance and ePayment
through electronic funds transfer (EFT). ePayment systems provide the
capacity to substantially lower transaction expenses, decrease the
burden on adjusters and call centers, and enable similar benefits to
accrue to medical provider trading partners.

There will be increased attention on keeping out-of-network costs down.
increased efforts to direct injured workers to network providers, many
state regulations or employer programs offer the flexibility to use
providers of their choice, which puts workers’ comp insurance payers in
the out-of-network territory. Therefore, such payers will
leverage third-party negotiation services to settle out-of-network
claims. Tapping into an outside team of skilled negotiators will help
workers’ comp insurance payers and providers reach mutually beneficial
agreements. The negotiation process will be accelerated, and insurance
payers will achieve an average of 30 to 40 percent success rates in
negotiating out-of-network charges. 

More information:


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