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Mitchell Industry Trends Report: Photo-Based Estimating Seeing Exponential Growth

Mitchell data shows a tenfold increase in insurer-administrated photo-based estimating from 2016 to 2017, with a corresponding drop in staff field inspections.

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As part of Mitchell’s 2018 Industry Trends report, the company analyzed any changes in insurers’ and claimants’ preferred method of inspection and what the impacts of these changes are.

Hans Littooy, vice president, professional services in Mitchell International’s auto physical damage business unit, discussed in the article how smartphones have changed the claim industry by creating a convenient, self-serve application for consumers.

Assignment Data Analysis Results

Mitchell data shows a tenfold increase in insurer-administrated photo-based estimating from 2016 to 2017, with a corresponding drop in staff field inspections. Additionally, use of independent appraisers more than doubled. The general trend appears to be a reduction in staff field inspections and an increase in insurance-administered photo-based estimating, with staff reductions resulting in additional independent appraiser utilization.

A concerning element in the shift towards photo-based estimating is found in supplement data. The following two tables highlight the net supplement amount and rate by MOI.

Table 1: Field Inspection vs. Virtual Estimating Changes – 2013 to 2017

Table 2: Supplement Amount (as % of original estimate), 2013 to 2017

Supplement amounts for photo-based estimating are higher than other channels, with the average amount exceeding 50 percent of the original estimate. While the supplement amount tends to be higher as a percentage of the original photo-based estimating, it is worth noting that the dollar increase compares relatively more favorably to other channels. This is a result of channels other than photo-based estimating typically deployed on higher-valued repairs, and photo-based estimating most typically employed on lower value repairs.

Table 3: Supplement Rate Comparison, Percent Comparison, 2013-2017

Supplement rates on PBE are consistent with other channels.

Implications for Continued Growth with Photo-Based Estimating Usage

As the data reveals, photo-based estimating is becoming a popular, cost-effective method of inspection option. In 2017, nearly 15 percent of all insurance-written estimates were completed using photo-based estimating. While the supplement rate is higher than other channels, Mitchell states that photo-based estimating does provide for a productive means of determining damages. Estimator productivity is typically increased substantially, from three to four field appraisals per day to more than 15 to 20, as well as reducing expenses associated with staff appraisers’ travel.

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Future Trends with Photo-Based Estimating to Improve Accuracy

While original photo-based estimating estimates generate more supplements than DRP-written estimates, Mitchell states that technology advances are coming that may significantly improve the photo-based estimating quality.

Visual recognition technologies are progressing rapidly. When combined with machine learning and the use of historical estimate data, software will soon be able to reliably create an estimate that can be quickly affirmed or edited by an appraiser.

photo based estimating images

Image 2: Computer Photo Vision to Better Identify Repair/Replace Decisions

Mitchell has developed technologies using computer photo vision to identify body panels and determine which panels may be repaired, and which require replacement. As Mitchell refines this technology, it will work its way upstream in the claims process, assisting photo-based appraisers by ensuring, consistent and accurate decisions.

Conclusion: Photo-Based Estimating is Rapidly Becoming a Preferred MOI

Photo-based estimating was introduced as a viable method of inspection six years ago. All indications suggest this inspection channel will continue to grow in popularity with consumers, and continue to deliver increased benefit for carriers and repair facilities. While supplement rates are high, advances in technology could improve photo-based estimating accuracy.

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To read the original report, click here

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