Overcoming Skilled Labor Shortages, Inflation, and Co2 Emissions

The challenges facing the collision repair industry over the past few years seem to keep rolling in like waves lashing a beach during a storm. The industry was already facing an impactful labor shortage caused by a flood of retirements and career changes; then it keeps being impacted by external factors such as government decisions, inflation, climate change and increasing vehicle complexity.

For years now, the predictions have come true and a wave of retiring baby boomers left thousands of auto technician job openings over the last decade. Further, the Bureau of Labor Statistics even projected a 4% decline in employment in the overall auto technician field through 2029.

As if that wasn’t enough, the industry keeps facing never-ending challenges such as cost increases due to multiple puzzle pieces, like modern vehicles being more costly to repair due to ADAS and new electric systems in place, or the cost of having vehicles taking up floor space while waiting for parts or approvals, as well as extra expenses having to tow vehicles from one destination to the other. Eliminating towing trips can reduce repair shop workloads and drive serious cost savings. Consider the savings on 10,000 claims in the U.S., where average towing fees run about $109 for a single trip. That means the total towing bill from those 10,000 incidents would cost just over $1 million. If the vehicle must be transported twice – once to the body shop for evaluation and then to the salvage yard as a total loss – it would cost the insurer more than $2 million.

In other markets, such as Mississauga, Ontario, according to Canadian Underwriter, a tow to a single location costs about $400 and taking a vehicle to two places (body shop then salvage yard) costs about $750. The same example of 10,000 claims would generate savings from about $2.5 million to more than $4 million in that market. If one were to extrapolate those savings across the industry, the savings would be staggering.

The Unavoidable Impacts

The cost of owning and maintaining a vehicle keeps elevating, as well as the prices for new and used cars and trucks. Not to mention the cost of parts and equipment for those vehicles, and the cost of gasoline. These combined with inflation have had widespread impact, especially on the insurance and collision repair industries. Rising used-car prices and auto parts shortages result in increased claims costs and thus higher underwriting losses each year. Likewise, inflation combined with the shortage of auto parts translates into significantly higher repair prices for policyholders.

One of the main effects of climate change on insurers is through the expected increase in natural catastrophes related claims. Climate change is driving a rapid and significant rise in insurance costs, fueled by more frequent and intense climate-driven disasters, causing peak global insured losses from natural catastrophes.

Sustainability and the reduction of greenhouse gases (GHG) are currently a clear focus for most industries and consumers. The entire automotive industry is embracing the global effort to achieve carbon emissions reduction by 2050. By introducing AI-powered technologies into the mix, companies can play a meaningful role in the collision repair industry by helping to limit global warming and responding to the impacts of climate change.

Simplified Workflows to Overcome Industry Challenges

Innovative AI-powered solutions can help industry stakeholders like carriers, shops and parts suppliers to alleviate the pressure of the above-mentioned factors affecting the industry. Fueled by Solera’s vast data lakes and backed by trained and experienced data scientists and industry experts, Solera’s AI-powered Claims Solutions have been supporting the automotive ecosystem with tools that help navigate today’s challenges. Qapter Intelligent Triage was precisely designed to improve the speed and accuracy of triage decisions following the first notice of loss (FNOL). This service alleviates labor pressure on estimators by eliminating unnecessary towing of total-loss vehicles to the body shop, and instead delivering them straight to the salvage yard, also saving costs of floor rentals.

First, Qapter Guided Image Capture empowers policyholders to launch the claim process and submit photos of vehicle damage following FNOL. Then, leveraging advanced image processing technology and machine learning algorithms, Intelligent Triage detects total losses, repairable vehicles, or advises if further inspection is needed by an assessor. The solution’s ability to manage the process reduces workloads for insurers; and, by identifying a total-loss vehicle at FNOL, the tool eliminates the added workload and cost of towing a totaled vehicle to a body shop and thus later incurring additional towing charges to get the car to a salvage yard.

Beyond FNOL and triage, Solera’s suite of AI-powered tools also includes Qapter Intelligent Estimating, an innovative solution in the market that is helping overcome estimator skillset shortages by automatically advancing the claims process. After the insured submits photos of the damage, the platform automatically creates a preliminary repair estimate in under three minutes. The automated pre-estimate eliminates the need for veteran, experienced adjusters to develop outmoded manual reports and lets them focus on more complex cases and do what they know best. Likewise, the less-experienced adjusters and estimators can initiate and advance the job confidently, by using Qapter as a training tool.

Qapter Intelligent Estimating can help insurance companies and repair shops limit the impact of inflation by optimizing repair decisions to help reduce the demand for new parts. The platform looks at damages objectively and recommends the most optimal repair operation using real repair research data. By autonomously creating an accurate, detailed list of required repair parts, Qapter also helps address the GHG emissions issue. This solution helps shops limit parts ordering to only the exact ones actually required to complete a repair, which can have a big impact on the environment, costs and cycle times.

As referenced previously, Qapter Intelligent Triage can help reduce the number of unnecessary tow trips, thus reducing costs and shortening key-to-key times for both the insurance company and the consumer. The environmental benefits are also significant: Tow trucks have a substantial carbon footprint, especially when actively towing vehicles. Using technology to eliminate what could add up to thousands of unnecessary towing assignments could prevent tons of excessive CO2 emissions.

The combined GHG reductions generated by eliminating unnecessary towing trips and optimizing repair-parts purchasing across the millions of vehicle accidents in North America could significantly impact the industry’s goal of reducing carbon emissions by 2050.

Technology is unquestionably revolutionizing the vehicle insurance and repair industries. Qapter’s AI-driven technology backed by trained experts creates competitive advantages for leading companies from start to finish. Technology empowers organizations with tools that help impress customers with a hassle-free experience and revolutionize the adjustor-to-repair process. Qapter’s AI and machine-learning features help them overcome labor challenges, offset the impact of inflation on the bottom line, and achieve industry environmental goals for a greener future.

As the collision-repair industry continues to weather the ongoing repercussions of inflation, trade and sustainability, Solera is here to help each business of the automotive ecosystem. For more information on our suite of tech-driven solutions, visit Solera Claims Solutions.

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