22 minute read
ARE COLLISION REPAIRERS READY TO EMBRACE THE BENEFITS OF AI AND AR TECHNOLOGIES?
NATIONAL NEWS
Are Collision Repairers Ready to Embrace the Benefits of AI AND AR TECHNOLOGIES?
In recent years, insurers and vehicle manufacturers have implemented the use of various technologies in their processes, such as artificial intelligence (AI) and augmented reality (AR), yet more often than not, technological advances tend to create more work for collision repairers, leaving shops behind. But what if those same technologies could be repurposed to benefit repairers?
Pete Tagliapietra, managing director of Data Touch LLC, and Frank Terlep, CEO of AutoTechcelerators, shared some insights with Hammer & Dolly on how AI and AR are currently used, how they might benefit collision shops and how repairers can prepare for the technology they’re likely to see in the near future.
OEMs utilize AI to streamline workflows, identify possible defects and improve quality control, while insurance companies use AI to automate the claims process and are diligently pursuing “no touch” auto claims through photo estimating. “AI already allows insurers to identify a total loss much earlier in the cycle, often before an estimate is even written,” Tagliapietra explains.
“AI also allows them to better analyze the estimate data to more effectively manage indemnity by enhancing their ability to evaluate repair shop performance and compare them. Information providers are also offering AI technology to write estimates, and once the technology is perfected, there will be huge efficiency gains from their efforts.”
Tagliapietra believes that AI could prove to be an asset to the collision repair community moving forward. “In today’s world, none of the OEM repair information options bring everything you need together immediately. Imagine using digital images of a damaged vehicle to immediately generate a list of all necessary repair procedures, pre- and post-repair scans, calibrations, ADAS information and OEM position statements – before you even write your first estimate.”
In the future, it will be possible to take photos of the visual damages of the vehicle to include the exterior, undercarriage and under the hood, and then use machine learning to generate the related OEM repair procedures, including which calibrations are needed and which procedures need to be performed for safety reasons, Tagliapietra predicts. AI adoption would allow body shops to increase productivity by improving cycle times, minimizing manual tasks and creating more value for consumers who prefer automation.
“In an industry where we contend with so much information on a daily basis, it’s nearly impossible to keep everything we need on our bookshelves, yet we need real-time access to that information. AI will be able to help shops deal with these challenges by identifying exactly which repairs are needed and provide everything needed for that specific job to allow for a more comprehensive estimate.”
Tagliapietra also suggests that AI can be used to provide better search and procurement parameters for parts, identify which operations are typically paid for and even provide prevailing competitive rates within a given market. “Machine learning will
ingest hundreds of thousands of data points which can be accessed on demand, and because it will include so many shops around the country, it will be much more statistically valid than some of the industry’s other valiant efforts.”
AR is another trending technology being used by vehicle manufacturers and insurance carriers. By providing the user with an enhanced version of the physical world by using sensory stimuli, such as visual elements and sound, AR is reshaping the vehicle design and manufacturing processes, in addition to being used to simulate crash and breakdown situations. Insurers use AR to assess and mitigate risk as well as for estimating damage.
Currently, the collision repair industry has seen very little use of AR or virtual reality (VR), and although several companies have begun developing AR/VR projects, none have progressed to the point of making a big impact – yet.
“The challenge with AR development right now is how expensive it is,” Terlep notes. “Until the industry fully embraces the use of repair procedures, the ROI for any company wanting to develop these technologies is very low.”
Still, companies like Tradiebot, Mitchell International and SimSpray are making progress, according to Terlep.
“SimSpray in particular is currently using VR technology as a customizable training tool for large-scale painter training and education programs that reduces training barriers by providing hands-on experiences without the spray booth, materials, setup, hassle or equipment required to start a typical coating project. In this capacity, VR technology can make painter training faster, safer and more efficient.”
“AR/VR technologies will dramatically change how the industry delivers training, as well as the way that repair information and procedures are accessed and presented,” Terlep anticipates. “AR/VR will also alter the ways that vehicles present information and data via windshields, windows, mirrors, dashboards and more.”
Terlep foresees an impact on the way vehicles are repaired as AR/VR implementation increases, likely resulting in an increase to the cost of repairs; however, he believes “AR will have a HUGE, positive impact on access to repair information and procedure platforms when shops accept it and prepare for it.”
How can collision shops prepare for the emergence of AI and AR in their facilities and ensure that they reap the benefits of these innovative technologies? Tagliapietra and Terlep agree: It all comes down to education.
“Shops need to actively study new technologies that are affecting the collision industry today, as well as those that will impact us in the future,” Terlep recommends. “It’s imperative to stay abreast of new technologies being installed on the vehicles they repair, the equipment used to repair those vehicles, the information and repair procedure platforms, as well as the different education and training platforms they’ll need to ensure their employees are trained to properly and safely repair the consumer’s vehicle.”
“I truly enjoy interacting with collision repairers and this entire industry,” Tagliapietra asserts, suggesting, “I wish shops would stay more current
Pete Tagliapietra Frank Terlep
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LOWER FREQUENCY + INCREASED TOTAL LOSSES = A LOSING EQUATION
As drivers get back on the road, collisions have returned with claim frequency on the path to pre-pandemic rates. Add in increasing vehicle complexity and the cost of both new and used cars, combined with high salvage values and supply chain disruptions, and the result is a total loss – for the consumer, the insurer and the shop.
NNon-comprehensive claims in 2021 increased by nine percent over the previous year but still lag 15 percent behind 2019 figures, according to CCC’s “The Continued and Forecasted Impact of the Pandemic on the P&C Insurance Economy;” however, while overall claims are lower, severity has increased, resulting in higher non-driveable percentages. In fact, total losses now account for approximately 20 percent of claims, and the average total loss vehicle cost in 2021 rose to over $12,500, a figure that previously failed to reach $10,000. “We get a ton of total losses,” says Tim Pfeifle (Tyson’s Corner Collision Center; Vienna, VA).
“Traffic seems to be coming back, but people are driving too fast which causes higher severity impacts. The used car market is on fire; vehicles are worth more, so there should be fewer total losses, but these cars are getting railed.” Since August 2019, used car values have skyrocketed by 34 percent, and the average MSRP has reached a record $45,000, leading to an increased age of vehicles on the road as well as elevated salvage values. “Because salvage values are so high, carriers are totalling cars before they should,” notes Steve
Krieps (Greg Cline Auto Body; Winfield, WV).
“Insurers have enlisted companies like Copart and
IAA on severely damaged vehicles, and a lot of cars in my state have been improperly totaled for that reason. “On the other hand, desk estimators at
Copart/IAAA sometimes write estimates that don’t total the car, so it sits for a couple weeks before being towed to a shop where it’s disassembled, blueprinted and written for three times the amount written by the desk estimator. The result is a total loss, but the month it takes to make that determination is incredibly inconvenient and frustrating for the vehicle owner.” Frustrations are mounting on the shop side of the equation as well, and some are related to the vehicles that are NOT totalling. “We’re repairing more new vehicles (five years old or newer) than we typically do,” shares Brian
Larson (T-Body Auto Body Repair; Mount Clare,
WV). “It seems like insurers are pressuring us to fix more vehicles as used car values increase – including some that maybe shouldn’t be fixed. Being able to repair a vehicle doesn’t necessarily mean it’s a good repair or the right thing to do for the customer. If the shop believes a car should be totaled, we shouldn’t be repairing it.”
Larson observes a definitive increase in the frequency of total losses on older vehicles, though, a trend he attributes to parts usage, availability and pricing. This issue originates with advancing vehicle technology and complexity, which has led to more replacement parts being required for each repair, but the dilemma is exacerbated by the inflation in raw materials prices and its negative impact on the supply chain. CCC’s report indicates that the average cost per part rose by more than six percent in 2021, the largest increase since 1997.
“Because we only repair European cars, we’re experiencing serious problems obtaining parts when they aren’t in the country,” Pfeifle states. “Our business model prohibits the use of aftermarket (counterfeit) or junkyard parts because we repair vehicles per OEM standards, so that makes it harder to find parts, the parts are more expensive, and the vehicle takes longer to repair.”
“Many cars have totalled out simply because we can’t obtain the parts needed,” Krieps adds. “We work with OEMs, regional wholesale suppliers and other vendors, but in some instances, there are literally no parts to be had.”
Although his shop’s total loss frequency is roughly static due to rising vehicle values, Danny Szarka (Dynamic Collision Services; Baltimore, MD) has dealt with some interesting circumstances:
“We’ve had a lot of different situations and variations that we’ve never encountered before. Recently, a car was totaled over a blind spot bracket that only costs $18.33! The vehicle was 98 percent repaired, but even though we tried every resource we could think of – and the insurer even reached out to Copart to try to source the part from a similar vehicle that had been totaled – we couldn’t acquire it. We try to verify and order all parts as soon as we complete our
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CONTINUED FROM PG. 25
blueprint so we can order our parts before the next guy does, but only so many parts are available. We set that expectation as soon as we bring a car in, so the vehicle owner understands what challenges we’re facing when it comes to acquiring the parts needed for their car.”
Parts delays worsen when photo estimating enters the calculation.
“Insurance companies benefit from photo estimating because it allows them to write the cheapest possible estimate,” Pfeifle believes. “It saves them millions of dollars, but it’s costing shops a tremendous amount of additional administrative time and effort.”
“The customer isn’t getting an accurate estimate using photos,” Larson agrees. “The inaccuracy of photo estimates causes delays in the shops because we have to wait for parts that weren’t included on the original estimate, or we start repairs on a vehicle based on that photo estimate, only to realize that it should have been declared a total loss. Either way, the customer goes longer without their vehicle.”
“Customers are already in a bad mood when they’re having vehicle issues, and their irritation only grows when I tell them the insurance adjuster neglected to include needed parts on the estimate and the repair is going to take an extra week while I wait to receive the rest of the parts,” Larson continues. “Everything is on backorder, so it’s not our fault, but I also can’t blame the customer for being frustrated. All I can do is empathize and apologize.”
Szarka tries to circumvent some of these inconveniences by inviting customers to come to his shop and allowing his staff to process the photo estimate for them.
“With calls to insurers averaging an hour or more, it’s the fastest way to get the first sheet written and set up the rental, plus it allows us to order parts soon. Even more importantly, it gives us a chance to win the customer’s trust and enhance that relationship. The best thing we can do, whether we suspect the vehicle is a total loss or if it can be repaired, is to get it into the shop so we can take a look and help the customer.”
The entire situation hurts consumers, and in some cases, customers are buying back their cars when they total, according to Szarka.
Pfeifle points out, “Even though customers may receive more money on a total loss than they used to, cars aren’t readily available for them to purchase, so they’re paying premium dollars for their replacement vehicle.”
“Consumers are fuming,” Krieps adds. “Their vehicles are moved without their authorization, and they’re unable to obtain rental cars, but the biggest challenge is that the valuation systems being used come up with low offers given the market, and any informed consumer is going to challenge that value. Unfortunately, consumers’ complaints don’t seem to go anywhere.”
Krieps believes the solution can be found in education. “As long as we’re upfront about everything and keep everyone informed, we haven’t had many problems.”
Educating consumers is important, but shops often struggle more when it comes to justifying why certain repairs are necessary to insurance adjusters.
“We fix vehicles to OEM standards,” Larson explains. “Our challenge is teaching the insurer’s adjuster that the vehicle manufacturer requires us to do these extra steps, even if their system doesn’t say it’s required. Their SOP may say one thing, but that doesn’t necessarily mean it’s the right way to fix the customer’s vehicle.”
“While insurance carriers still like to tell us we’re the ‘only one,’ the level of documentation we keep prevents most major issues,” Krieps says. “When they push back, it’s ultimately a business decision about whether we want to fold, but with the proper documentation, there’s not much they can do.”
At the same time, insurers contend with similar issues as body shops in terms of staff shortages, and Krieps sympathizes with them:
“They’re overwhelmed and frustrated too. In my market, most insurers don’t have field staff, so they’re hiring independent third-party firms which creates so much smoke that you never know who to talk to when there’s an issue.”
“Phone wait times to reach an insurer start at an hour because they’re swamped just like we are,” Szarka acknowledges. “Adjusters are maxed to capacity with up to 50 cars in their portfolio, so there’s no way they have the time they need to accurately write an estimate.”
Understaffing at insurance companies leads to other problems for shops, including a lack of storage space, according to Pfeifle. “We’ve had multiple cars sitting on our lot for over a month because insurers are so shorthanded that they just can’t process the paperwork fast enough.”
Facing so many daily struggles makes it easy for shops to get discouraged and disillusioned since so many things are out of their control, but many collision professionals know it’s just a matter of doing the right thing.
“Our customers pay for coverage and deserve an accurate assessment,” Larson stresses. “We fix their car right and keep them informed through the process. All we can do is our best for them.”
Krieps believes the key is being “very transparent with our customers so they know exactly what’s happening the entire time we have possession of their vehicle.”
“We can’t control what’s happening or the problems that are created,” Pfeifle laments. “It is what it is, but by communicating with customers, we can help them understand that any delays or added expenses are related to ensuring their car is safely and properly repaired.”
Szarka concurs that some aspects are out of the shop’s control, but he also suggests the solution can be found within the problem itself:
“Everyone is dealing with the same things. All businesses are short-staffed and frustrated, and each situation is different. Yes, we’re making decisions based on the facts in front of us, but those facts change every day, so we have to learn to adapt if we want to turn these negative circumstances into a positive outcome.” H&D
Executive Director’s Thoughts
So much of the total loss process is outside of the repairers’ control, yet as many have expressed, it’s still our responsibility to convey the details and in many cases, the delays and bad
news, to the consumer. -Jordan Hendler CONTINUED FROM PG. 21
with what’s going on. For many shops, their biggest weakness is their inability to pay attention to what’s happening in the industry and what’s available to them to improve efficiency because they’re so busy repairing vehicles. With so much coming, repairers need to stay informed now more than ever.
“For too long, the focus has been on providing the insurance community with better technology, and it’s time for it to come full circle to benefit shops. The technology already exists and is gaining momentum. Applying it to the body shop side will enable us to leverage the same technology used by insurers and manufacturers to create a better way for body shops if we can just embrace it.” H&D
Executive Director’s Thoughts
Though ROI will dictate industry momentum in these areas, as Pete said, it would be a leap in estimating - and thus repairing vehicles - if the technologies applied in the insurance side would cross over. Their ability to dissect data or get assist with repair planning has already been far above ours. It would be awesome to see that gap of
technology narrowed! -Jordan Hendler
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