Distinctly different traffic patterns on U.S. roads and continued supply chain disruptions, as well as the rising costs of collision repairs are highlights of CCC Intelligent Solutions’ October 2021 the Continued and Forecasted Impact of the Pandemic on the P&C Economy study. All of which directly affects the auto glass industry.
While the first quarter of 2021 saw a 15% decrease in claims for collision repair, the second quarter experienced a more than 40% increase, followed by a more than 10% increase in the third quarter.
“Those are much, much bigger increases than I’ve ever seen,” says Susanna Gotsch, senior director and industry analyst with CCC Intelligent Solutions, who has been in the industry for 30 years. The percentage increases Gotsch is seeing from one quarter to the next are far larger than highest increase of 5% she is used to seeing.
Drivable vehicles involved in collisions are requiring an average of $5,500-6,000 for repair, while non-drivable vehicles need $2,500-3,000 in repairs, according to Gotsch. “Within both, we’re seeing pretty healthy increases,” Gotsch says.
Gotsch says that in addition to the change in traffic patterns and the rising costs of repairs, the study’s evidence on supply chain issues, particularly related to glass, were also significant to her. “These folks are having challenges [in the auto glass shops],” she says. The cost of materials for repairs, including paint and parts are up from one year ago. “We just continue to see the challenge of getting the parts,” Gotsch says, referring to the truck driver shortage affecting the delivery of materials across the U.S.
The study’s results regarding how traffic patterns remain changed after the COVID-10 pandemic is also significant to Gotsch. More drivers are on the road during weekday nights and midday during the week as opposed to the pre-pandemic pattern of morning and evening rush hours. She says the single most predictor of auto insurance claims is when most cars are on the road. “We’re getting closer [to pre-pandemic collision numbers],” Gotsch says. Numbers are up from 2020, however still 15% down from the third quarter of 2019.
“We’ve seen some healthy increases in average repair costs,” Gotsch says.
As auto glass shops attempt to return to business as usual after the COVID-19 pandemic, they continue to struggle with staffing challenges, a glass shortage, a rise in the volume of repairs needed increase in the cost of repairs. “So all of these are adding to higher repair costs,” Gotsch says.
CCC’s most recent study was written and analysis conducted until the end of September 2021. Gotsch says the study is routinely conducted by CCC Intelligent Solutions to keep customers updated on industry topics.
The total of miles driven in the U.S. in 2021 has surpassed miles driven in the same months of 2020, the study states. As of June 2021, miles driven are nearing 2019 numbers. “But the pandemic has meant anything but stability in how, when and where we drive,” the study states.
The study also revealed that an estimated 40% of U.S. residents continue to work from home, office occupancy is between 30 and 35% for U.S. companies, and many companies indicated an intention to postpone a return of remote employees to the office until early 2022.
“Moving forward, businesses will need to further evaluate key issues like supply-chain sourcing, hybrid work, and how to best take advantage of rapidly evolving technologies like digital, AI, mobile and cloud to improve collaboration and drive efficiencies back into the process,” the study concludes.