Industry Insight with John Yoswick
—John Yoswick is a freelance writer based in Portland, Oregon who has been writing about the automotive industry since 1988. He is the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit www.CrashNetwork.com). Contact him by email at jyoswick@SpiritOne.com.
Collision Repair Industry Trend Data Shows Need for Changes to Insurer DRP Metrics
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Collision repairers have for some a little less than two full days longer ing to CCC. Today, it’s just over supplements has also grown, where time been saying changes they are than they were in 2019. By the time 30%. The percentage involving two, over 35% of the overall repair cost is seeing within their business point to we get to a $10,000 or higher repair, three or four supplements has nearly added during supplements for those with Ed Attanasio a need for insurers to adjust their key the average repair time exceeds 35 tripled over that time span to more claims with four or more suppleperformance indicators (KPIs) met- days. than 30%. ments,” the report said. rics for direct repair claims. Another interesting statistic Recent industry data from CCC for DRP shops concerned about the Intelligent Solutions support the metrics insurers are using to meatrends shops are reporting. sure their performance: The decline Average repair costs, for exin labor hours per day that has been with Ed Attanasio ample, rose 8% in 2021, about one occurring since 2017 only acceleratpercentage point higher than U.S. ed in 2021. Direct repair shops were inflation overall; the average part producing about 2.5 labor hours per cost across all part types—OEM and repair day on drivable vehicles in the aftermarket—was also up 8% last second half of 2021, down from just year, the “largest annual increase we over three hours during the same pehave seen” since CCC began reportriod in 2020, and down from more with Ed Attanasio ing that data in 1997, according to than 3.5 hours in 2016 and 2017. CCC’s Susanna Gotsch. For non-drivable cars, shops “Moving forward, most anawere producing about two labor lysts expect that we’ve seen most of With more larger repair jobs during the pandemic, cycle time across the industry has risen hours per day during the second half the increase in parts costs that we are of 2021, down from above 2.5 in going to see,” Gotsch said. “We’re “In addition, the share of the 2018 and 2019, and about three in “Subsequently, we hear more carriwith Ed Attanasio not likely to see part prices reverse ers saying their customers are run- overall repair cost added during 2017. substantially, but the largest increas- ning out of allocated rental days, es that we experienced in 2021 are and many carriers have said they are not likely to be repeated in 2022. looking at…their policies to deterWhere most analysists are predict- mine if those [limits] should be ading [the industry] will see the most justed.” pressure in 2022with will beStacey on wages.” Phillips Another data point of note from Average total labor hours per CCC’s recently-released annual repairable non-comprehensive claim Crash Course Report: The national grew slowly from 2011 (23 hours per average body rate in 2021 ($52.86) claim) through 2019 (23.9 hours), but was up just 1% from the prior year, then jumped to 24.7 hours in 2020, the smallest percentage increase and to 25.8 hours last Stacey year. Gotsch since 2011, in a year when overall with Phillips said the pre-pandemic growth was inflation in the country was 4.7%. related to vehicle complexity, but the CCC reports overall claim larger increase in the last two years counts were up nearly 10% in 2021 is based in part on the increase in the compared to the prior year, but still percentage of non-drivable claims. down more than 13% from 2019. Compared to 2019, there was “Month-by-month compariwith Stacey Phillips more than a full percentage point sons, however, show volumes have jump in DRP claims with repair been steadily rebuilding,” CCC said costs above $10,000 in 2021, and a in the report. For example, overall 2.5 percentage point jump in claims claim counts in January 2021 were Large Inventory of Genuine Kia Parts between $5,000 and $10,000. That down 19% versus January 2019, but Experienced Wholesale Parts Staff results in longer cycle times, Gotsch by December 2021, overall claim said. counts were down just 5.9% comwith Stacey Phillips “For each $1,000 increment, pared to December 2019. we essentially see an additional two One statistic in the CCC report 213.342.0980 Fax full days in the overall repair time, will be of little surprise to shops: The 1834 S. Figueroa Street or keys to keys time,” she said. “In- percentage of claims with suppleMon-Fri 7am-7pm Los Angeles, CA 90015 dustry wide, DRP repairs are now ments continues to increase. Back in taking over 12 days, two full days 2001, more than 50% of DRP claims above where they were in 2020, and did not have a supplement, accord-
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34 MAY 2022 AUTOBODY NEWS / autobodynews.com
