Labour Pressure And Vehicle Complexity Are Reshaping Collision Repair: CCC

The CCC Intelligent Solutions ‘Crash Course Q1 2024’ report has detailed how increasing vehicle complexity, rising labour costs and skills shortages are placing persistent pressure on repairers and insurers.

Advanced technology contributes to more expensive repairs, higher claims costs, and longer cycle times, while factors such as scheduling backlogs contributed to a 60 per cent increase in time for vehicles to enter repair shops after estimate completion, compared to pre-pandemic times.

“Much of what the industry is experiencing is reflective of a new normal where complexity, beginning with the vehicle itself, is reshaping the market landscape,” said Kyle Krumlauf, Director Industry Analytics at CCC and co-author of Crash Course.

Key findings of the report include:

  • Vehicle Tech Transformation: Vehicle claims and collision repair industries face challenges in keeping pace with vehicle technology transformation, such as increased costs associated with repairing advanced driver assistance systems and other technology.
  • Electric Vehicle Repairs: EVs are becoming more common in repair assessments. They carry higher costs, especially in labour, while longer repair times are common due to capacity constraints and detailed repair procedures. The vehicles are also totalled less often than non-EVs, reflecting changing valuation trends.
  • Replace Versus Repair: An emerging ‘replace versus repair’ trend demands different skill-sets for the repair industry, leading to higher costs for consumers. Over the past decade, the cost differential for repairing older versus newer vehicles has grown 35 per cent.
  • Urbanisation and Weather: Acknowledging the impact of growing urbanisation and volatile weather patterns as a constant catalyst for losses, the report confirms increases in property losses from severe weather events.
  • Subrogation: High turnover among adjusters is hindering subrogation efforts, leading to decreased referrals, and complicating revenue and cost reduction strategies.
  • Claims and Repair Technology: Adoption of AI and automation tools to accelerate and inform functions from estimating to scanning to parts ordering continue to grow, as the industry looks to offset the effects of labour shortages and the complexity that comes with today’s sophisticated vehicles.

In addition to macro trends and topics, Crash Course Q1 2024 includes industry-level detail on claims frequency and impact severity, medical costs, parts costs and total loss trends.

Previously published annually, Crash Course will be published quarterly in 2024 to provide more frequent updates on key trends and insight.