Collision Repair Industry Trend Data Shows the Need to Change Insurers’ DRP Measures

Bodybuilders have been saying for some time that the changes they are seeing within their business indicate that insurers need to adjust their key performance indicators (KPIs) for direct repair claims.

Recent industry data CCC smart solutions support the trends that the stores report.

Average repair costs, for example, increased by 8% in 2021, about one percentage point more than headline inflation in the United States; the average parts cost for all types of parts—OEM and aftermarket—also rose 8% last year, the “largest annual increase we’ve seen” since CCC began reporting this data in 1997, according to CCC. Suzanne Gotsch.

“Looking ahead, most analysts expect that we’ve seen most of the cost increases in parts that we’re going to see,” Gotsch said. “We probably won’t see coin prices reverse substantially, but the biggest increases we’ve seen in 2021 are unlikely to be repeated in 2022. Where most analysts are predicting [the industry] will see the most pressure in 2022 will be on wages.

The average total hours worked per non-global repairable claim increased slowly from 2011 (23 hours per claim) to 2019 (23.9 hours), but then jumped to 24.7 hours in 2020 and 25.8 hours last year. Gotsch said pre-pandemic growth was tied to vehicle complexity, but the biggest increase over the past two years is based in part on the increase in the percentage of non-driving claims.

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

“For every $1,000 increment, we’re essentially seeing an additional two full days in overall repair time, or key-to-key time,” she said. “Industry-wide, DRP repairs now take over 12 days, two full days above what they were in 2020, and just under two full days above 2019. By the time we get to a repair of $10,000 or more, the average repair time is over 35 days.

“Subsequently, we are hearing more and more carriers say that their customers are running out of allotted rental days, and many carriers have said…