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Tackling soaring vehicle repair costs in the motor industry

Pete Thompson

Pete Thompson, director of product at Motor Repair Network, explores key tactics insurers can employ to streamline claims processes and reduce costs.

As vehicle repair costs skyrocket, insurers face the challenge of mitigating the impact on motor claims. With prices surging in the past few years due to supply chain disruption, skilled labour shortages, and car delays, insurers need effective strategies to address this issue.

Additionally, adapting repair strategies, addressing parts delays, and establishing transparent communication with customers can help insurers navigate the “new normal” of the industry. By implementing these measures, insurers can effectively combat claims inflation, optimise cost control, and provide policyholders with an exceptional claims journey.

So, what can insurers do to speed up claims and reduce costs as much as possible?

1. Use digital tools to improve data and image capture

Making the right claim and repair decisions upfront significantly impacts costs and customer satisfaction.

Accurate first notification of loss and right-first-time triage and deployment prevent delays, streamlining the repair process, so it’s worth looking at digital solutions to improve data capture and decision-making.

Most insurers have reviewed their policies on green and aftermarket parts, but now’s the time if you haven’t.

One great example is app-based damage capture, which guides policyholders to provide better descriptions of damage location and severity and take high-quality vehicle images.

Insurers have traditionally struggled to get images of vehicle damage from policyholders, but they are central to the decision-making process.

At Motor Repair Network, introducing a damage-capture app led to a 70% increase in claims with usable images, allowing us to significantly improve accuracy in identifying total loss claims and vehicles suitable for mobile repair, keeping them out of body shops where capacity is in high demand.

2. Consider AI-powered decision-making

As the race to improve AI technology grows, insurers should consider its potential in claims management. Using computer vision, AI models can quickly and accurately identify vehicle damage and assess repair costs.

An AI-powered system could automatically deploy or approve repairs, but it would likely be part of a hybrid approach, supporting human decision-making to improve efficiency and reduce errors.

3. Adapt your repair strategy

Competition for body-shop capacity is at an all-time high. Look for a repair network with real-time visibility of available capacity and capability. This will enable effective network management and deployment across all repair and vehicle types.

Real-time data also supports transparency and fosters collaboration to overcome specific challenges within the supply chain.

It’s also worth looking at a broader range of repair methods. Roadside and mobile technicians are a viable option for minor repairs, offering quality repairs and reducing pressure on the body-shop network.

At Motor Repair Network, these repair methods’ quality, speed and convenience drive excellent customer satisfaction scores.

4. Help repairers tackle parts delays

Like many industries, the motor trade has been affected by supply chain challenges – particularly regarding vehicle parts.

Most insurers have reviewed their policies on green and aftermarket parts, but now’s the time if you haven’t.

You may also find value in proactively working with a specialist parts supplier to tackle parts delays. A parts specialist can search across a broader range of suppliers than an individual body shop, offering alternative options for parts on backorder.

5. Support customers to accept ‘the new normal’

Increased efficiencies can only do so much – and while repair times have now settled down, they look set to continue at their current level over the year ahead.

Upfront communication around likely timescales and potential parts delays goes a long way in setting customer expectations.

Make sure your customer communication framework is adapted for a longer repair cycle – proactive updates will significantly reduce incoming call volumes.

Finally, system integration is crucial in offering a real-time view of claims status across the supply chain and creating a joined-up customer experience.

Conclusion

The vehicle repair industry has been through a significant change over recent years.

While this has created challenges for motor claims, it’s also generated opportunities for new ways of working within the supply chain.

There are several steps insurers could take right now to combat claims inflation:

  • Look at digital solutions to improve data and image capture at the beginning of a claim.
  • Explore the opportunities for better decision-making offered by AI.
  • Review repair and parts policies to reduce pressure on body shops.
  • Drive system integration for real-time capacity management and a joined-up customer experience.

These steps can improve efficiency, support cost control and create an excellent policyholder experience.

To hear more from Motor Repair Network, catch them at the Motor & Mobility Conference or click here.

Pete Thompson is director of product at Motor Repair Network

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