Mitchell report examines factors in auto repair costs

Report notes rising complexity increases repair costs.


Mitchell, a provider of technology, connectivity and information solutions to the property and casualty claims and collision repair industries, announced the availability of its Industry Trends Report (ITR), for the third quarter of 2013. The latest report offers expert insight and guidance into evolving industry regulations and current events, and outlines how certain tools like Agile development and next-gen data gathering position companies at the forefront of market innovation.

The feature article, written by Greg Horn, vice president of industry relations at Mitchell, analyzes the impact parts costs have on average severity over time. He highlights that the emphasis is too often placed on the four major cost areas – labor, parts, paint and material – which make up the average paid repairable severity. Charting the dollar spend for parts against labor types and paint and materials costs beginning in 2005, Horn found that “there was an overall decrease in average repairable severity leading into and during the recession, and a uniform increase in average paid severity afterwards,” and by investigating the other components that make up the cost of an estimate, he concludes that despite the reduced number of parts per estimate, the fact that “cars have become more complex and have more painted panels, such as color-coded bumpers” is driving the increase in average repair severity for specific vehicles.

A supplemental article written by Paul Rosenstein, vice president of claims solutions at Mitchell, describes how Mitchell will be changing claims estimating with 3D scanning technology. His forward-looking article details Mitchell’s current efforts to build a database of clean 3D scans of vehicles and how that information could be used in the future to innovate with physical damage claims processing. Rosenstein envisions “we can leverage the data collected to support other workflow scenarios like consumer self-service, fraud detection and deformation-based estimating.”

The new casualty edition, which now includes auto casualty and workers’ compensation data, features innovation insights and medical price index data, alongside best practices in medical bill review.

The feature article, “Innovation Applications for the P&C Industry,” by Shahin Hatamian, vice president of product management and strategy for Mitchell’s workers’ compensation solutions division, and Vidya Dinamani, vice president of product management and marketing for Mitchell’s auto casualty solutions dDivision, highlights the value of innovation through Agile development processes. In the P&C industry, effective innovation is built around customer feedback and collaboration, which in turn “leads to new ideas that quickly turn into refinements that are developed and tested again with customers. The net result is better value to customers by incorporating ideas internally and externally to the development organization.”

In addition, Shannon Frank, director of consulting services for Mitchell’s workers’ compensation solutions division, offers guidance for managing medical bill review operations in a best practices supplemental piece. She underscores, “efficiency and cost containment are paramount,” yet “accuracy in adjudication and compliance with state regulations must serve as a foundation for all bill review decisions.” Frank’s list of 10 best practice tips help operations succeed in today’s challenging landscape by embracing the core tenets of internal processes and technology solutions.

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