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Collision Repair Industry Trend Data Shows Need for Changes to Insurer DRP Metrics

Collision repairers have for some time been saying changes they are seeing within their business point to a need for insurers to adjust their key performance indicators (KPIs) metrics for direct repair claims.

Recent industry data from CCC Intelligent Solutions support the trends shops are reporting.

Average repair costs, for example, rose 8% in 2021, about one percentage point higher than U.S. inflation overall; the average part cost across all part types—OEM and aftermarket—was also up 8% last year, the “largest annual increase we have seen” since CCC began reporting that data in 1997, according to CCC’s Susanna Gotsch.

“Moving forward, most analysts expect that we’ve seen most of the increase in parts costs that we are going to see,” Gotsch said. “We’re not likely to see part prices reverse substantially, but the largest increases that we experienced in 2021 are not likely to be repeated in 2022. Where most analysists are predicting [the industry] will see the most pressure in 2022 will be on wages.”

Average total labor hours per repairable non-comprehensive claim grew slowly from 2011 (23 hours per claim) through 2019 (23.9 hours), but then jumped to 24.7 hours in 2020, and to 25.8 hours last year. Gotsch said the pre-pandemic growth was related to vehicle complexity, but the larger increase in the last two years is based in part on the increase in the percentage of non-drivable claims.

Compared to 2019, there was more than a full percentage point jump in DRP claims with repair costs above $10,000 in 2021, and a 2.5 percentage point jump in claims between $5,000 and $10,000. That results in longer cycle times, Gotsch said.

“For each $1,000 increment, we essentially see an additional two full days in the overall repair time, or keys to keys time,” she said. “Industry wide, DRP repairs are now taking over 12 days, two full days above where they were in 2020, and a little less than two full days longer than they were in 2019. By the time we get to a $10,000 or higher repair, the average repair time exceeds 35 days. “Subsequently, we hear more carriers saying their customers are running out of allocated rental days, and many carriers have said they are looking at…their policies to determine if those [limits] should be adjusted.”

Another data point of note from CCC’s recently-released annual Crash Course Report: The national average body rate in 2021 ($52.86) was up just 1% from the prior year, the smallest percentage increase since 2011, in a year when overall inflation in the country was 4.7%.

CCC reports overall claim counts were up nearly 10% in 2021 compared to the prior year, but still down more than 13% from 2019.

“Month-by-month comparisons, however, show volumes have been steadily rebuilding,” CCC said in the report. For example, overall claim counts in January 2021 were down 19% versus January 2019, but by December 2021, overall claim counts were down just 5.9% compared to December 2019.

One statistic in the CCC report will be of little surprise to shops: The percentage of claims with supplements continues to increase. Back in 2001, more than 50% of DRP claims did not have a supplement, according to CCC. Today, it’s just over 30%. The percentage involving two, three or four supplements has nearly tripled over that time span to more than 30%.

“In addition, the share of the overall repair cost added during

Shop Showcase supplements has also grown, where over 35% of the overall repair cost is with Ed Attanasio added during supplements for those claims with four or more supplements,” the report said. Another interesting statistic for DRP shops concerned about the Social Media for Shops metrics insurers are using to measure their performance: The decline with Ed Attanasio in labor hours per day that has been occurring since 2017 only accelerated in 2021. Direct repair shops were producing about 2.5 labor hours per repair day on drivable vehicles in the SEMA Show Goes On second half of 2021, down from just over three hours during the same pewith Ed Attanasio riod in 2020, and down from more than 3.5 hours in 2016 and 2017. For non-drivable cars, shops were producing about two labor Media and Publicity for Shops hours per day during the second half of 2021, down from above 2.5 in with Ed Attanasio 2018 and 2019, and about three in 2017. Shop Strategies with Stacey Phillips Body Shops Giving Back with Stacey Phillips Tips for Busy Body Shops with Stacey Phillips My SEMA with Stacey Phillips Shop Strategies with Victoria Antonelli

With more larger repair jobs during the pandemic, cycle time across the industry has risen

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