Navigating Challenges with Innovation: Empowering Insurers for a Resilient Future with XpertEstimate

The insurance industry has long grappled with challenges such as rising repair costs, staffing shortages, and managing claims volumes during peak times. However, the pandemic and now worsening natural disasters are introducing new obstacles and exacerbating existing pressure points, creating a “perfect storm” for insurance carriers. As the industry moved beyond the pandemic’s disruption, carriers now face a landscape that combines traditional hurdles with newer issues like worsening climate change and skyrocketing inflation. In this blog, we will delve into the top challenges faced by insurance claims departments and explore how Solera’s XpertEstimate, a virtual auto estimating solution, provides an innovative way forward.

1. Industry Impact:

The initial six months of this year were marked by a series of severe storms that led to insured losses totaling an astonishing $34 billion. This figure stands as the highest ever recorded for a half-year period. According to the most recent report by Swiss Re Group, the cumulative economic toll inflicted by natural catastrophes globally during the first half of 2023 surged to a staggering $120 billion. This value surpasses the 10-year average by a substantial 46%.

This assessment underscores the ongoing challenges faced by insurance carriers, struggling to navigate their way to profitability amid the dual challenges of escalating costs and the volatility of the market. A revealing indicator of this struggle comes from the U.S. Property & Casualty industry, where the combined ratio spiked to 106.6 in Q3 2022, marking the highest level observed in five years. This elevation can be attributed significantly to the mounting costs of repairs and replacements, coupled with extended cycle times required for claims resolution.

2. Staffing Challenges:

The insurance industry confronts a critical staffing challenge, with the aging workforce requiring replacement. Despite the low unemployment rate in the industry (2.1% as of 2022), carriers find it challenging to quickly hire new talent to fill the void left by retiring employees. The US Bureau of Labor Statistics predicts that over the next 15 years, 50% of the current insurance workforce will retire, leading to a staggering 400,000 open positions. This situation necessitates efficient and cost-effective claims solutions for carriers to adapt and thrive.

3. Rising Auto Repair Costs:

As the workforce gradually returns to physical offices, the resulting surge in accident severity is intricately linked to a notable escalation in auto repair expenses. The effect of pandemic-induced supply chain disruptions has materialized in augmented part prices. Concurrently, the scarcity of skilled personnel in automotive body shops has compelled the implementation of augmented wages to both allure and retain proficient technicians. Illustrating this trend, the average gross appraisal value for Q3 2022 surpassed Q3 2019 by a significant 13.6%, with costs for replaced components and body labor per estimate surging by 27.5% and 13.2% during the same interval, respectively. This mounting cost burden, coupled with the ongoing march of technological advances in new vehicle models, is anticipated to uphold the trajectory of escalating repair expenditures.

Addressing the Challenges with XpertEstimate:

Insurance carriers require efficient and flexible claims solutions to navigate through these challenging times. Solera’s XpertEstimate offers a no-code, turn-key virtual appraisal service that enhances the accuracy and efficiency of the claims process while reducing costs. Here’s how XpertEstimate helps:

1. Self-Service Options: Customers can create and submit high-quality damage photos through a fast, secure self-service process powered by Guided Image Capture.

2. AI-Powered Appraisals: Solera’s AI-powered platform, Qapter®, uses sub-second image processing and deep-learning algorithms to detect damaged parts and recommend repair operations.

3. Real-Time Parts Sourcing: XpertEstimate incorporates intelligent parts sourcing and procurement using Solera’s PartsNetwork® solution.

4. Expert Insights: The XpertEstimate team, with an average of 20+ years of industry experience, adds valuable insights to the completed estimate, improving accuracy and freeing carrier staff for customer-facing tasks.

Flexibility and Scalability:

XpertEstimate offers the flexibility and scalability that modern claims departments need. Whether handling surges in volume, supplementing permanent staff, or filling staffing gaps, carriers can easily customize this solution to fit their unique situations. The integration process is straightforward, and minimal IT resources are required, ensuring a frictionless transition.

Conclusion:

The insurance industry faces a complex landscape of challenges as it emerges from the disruption caused by the pandemic and the ever-worsening natural disasters. To overcome staffing shortages, rising repair costs, and other hurdles, carriers must embrace innovative solutions like Solera’s XpertEstimate. This virtual auto estimating service provides a frictionless, flexible, and scalable approach to claims processing, helping carriers thrive in the uncertainty. With XpertEstimate, insurers can efficiently navigate the “perfect storm” and set sail towards a successful and resilient future.