Continued Growth of Network Management

Susanna Gotsch / Research /

Claim Counts Recover

The collision repair industry has experienced a great deal of change over the last several years. The Great Recession drove already flat-to-declining vehicle accident frequency down further, while high unemployment rates led to further declines in overall U.S. miles driven. In 2014, however, the industry saw claim frequency rise to levels last seen pre-recession.

And through first quarter 2015, the industry continues to see elevated claim counts, particularly in states that saw the brunt of another brutal winter. Overall repairable claim counts are up approximately 3 percent, while total loss counts are up over 7 percent, reflecting both severe weather and an older vehicle population still on the road in the U.S.

Snow, ice and heavy rain storms impacted broad swathes of the U.S., with the Midwest, Northeast and Southwest particularly impacted. The top 10 and bottom 10 states with the largest and smallest increases in repairable claim counts Q1 2015 versus Q1 2014 are included in the table. Worth noting is that despite declines year-over-year in Q1 2015 vs Q1 2014, volume in all but one of the ‘bottom 10’ states is still up from Q1 2013. With employment up, miles driven in the U.S. increasing, and continued strong new vehicle sales, the collision repair industry is in store for another healthy year in 2015.

Collision Repair Industry Changes

Almost every week there is an acquisition announcement made within the collision repair arena. According to data from Focus Investment Banking, acquisitions representing $800 million in revenue were made in 2014 by the big four MSOs. Many of these acquisitions were of smaller regional MSOs with estimated total revenues of approximately $1.5 billion. And the pace of acquisition continued in the first quarter of 2015.

Comparison of the volume share of DRP appraisal counts uploaded to CCC reveal growth of MSO’s. Over the last 5 years, MSOs grew in volume share by more than 25 percent, growing to 36 percent of CCC’s total DRP appraisal count. Analysis of CCC appraisal counts where the assignment is an open shop assignment point to a similar trend, although the share written by an Independent shop is over 80 percent of the overall open shop assignment count.

However, optimism in the industry appears to be strong across shops of all sizes. The Q4 2014 “CollisionWeek Collision Repair Industry Business Conditions” survey showed 57.3 percent of respondents reported higher sales. Additionally, the four-quarter moving average for the percent of survey respondents reporting higher sales had been trending flat or up since Q1 2013, and is now experiencing its highest increases since 2006 for shops of all sizes (‘<1 million’; ‘1-2 million’, and ‘>2 million’).

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