Important Client Update: COVID-19

Accident Advisor

For the minutes after an accident, there’s CCC Accident Advisor.

Today’s connected vehicles are advancing the safety of our roadways and the points of connection with consumers. Relationships with insurance companies no longer start at quote or claim. Relationships with automotive manufacturers no longer end at point of purchase. Today, these relationships extend to the point of impact.

 

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HOW IT WORKS

Connected vehicles and CCC X connect insurers and auto manufacturers to drivers at the point of impact so they can provide guidance and comfort.

 

Collision
Raw, real-time OEM telematics data flows to the CCC X data exchange where it is converted to actionable insights. Having detected a collision and its approximate severity, it allows clients to support the driver as appropriate. For less severe incidents, clients can immediately text the driver a link to access the Accident Advisor app.

Capture
The Accident Advisor app leads the driver through post-collision steps and provides guidance on capturing post-incident crash facts and photos, alerting insurance, and finding a repair facility.

Claims
Drivers can easily submit crash documentation to participating insurers without exiting the Accident Advisor app. This injects unprecedented immediacy into the beginning of the claims resolution process.

CUSTOMER EXPERIENCE POWERED BY INSIGHTS.

CCC Accident Advisor powers this point of connection. Built on the hyperscale CCC X data exchange with the capacity to capture every turn, every brake, every sensor collected by a connected vehicle. With connections so advanced, telematics data can detect an incident and triage the severity instantly.

Operating in the COVID-19 Environment: Helping Customers and Operations Navigate a Touchless Claims Experience

Mobile MOI helps to enable digital claims, deliver customer experience, and improve cycle times. With COVID-19, and calls for Social Distancing, mobile MOI is emerging as an essential tool to support claims staff and policyholders. COVID-19 (coronavirus) is moving quickly across the globe and with each passing day we learn more about the virus from medical experts. Social Distancing, the practice of limiting personal contact, is being enforced across the US to deter the spread of the virus. Despite the recommended distancing, cars are still being driven and accidents are occurring, albeit at a lower frequency. When accidents do occur, there is a new set of pressures on carriers to deliver a holistic claims experience for their customers while maintaining strict safety protocols for their employees. Insurance companies who have implemented digital capabilities via mobile to facilitate estimation and downstream claims processing are most prepared to deliver a seamless experience, particularly in today’s environment. Doing so helps protect the safety of their customers and employees in an efficient manner. Read the White Paper.

How Claim and Accident Frequency May Be Impacted by COVID-19

There are now nearly 200K confirmed cases of COVID-19 globally.  The virus is now anticipated to be much more a demand shock versus a supply shock to the global economy. Trying to assess what the long-term impact of COVID-19 to the automotive, insurance and collision repair industries is difficult.   Here are some potential outcomes of the coronavirus to the automotive insurance and collision repair industries. Fewer potential accidents as miles driven fall Historically the U.S. has seen overall miles driven in the U.S. fall during recessionary periods.  During the last recession (the “Great Recession”) that ran from December 2007 to June 2009, miles driven fell over 3 percent from its pre-recession peak in November 2007 to its lowest point in February 2010 during the post-recovery. Source: FRED® Moving 12-Month Total Vehicle Miles Traveled, www.research.stlouisfed.org. Countries, states, and communities across the globe are on lockdown, asking residents to go out only for food and other essential needs.  Businesses have begun to close for an unspecified amount of time, and many are having workers work remotely.  This will most certainly lead to significant declines in miles driven, particularly at peak driving times, where congestion has been shown to drive auto accident and claim frequency. An index of congestion from TomTom NV was down by nearly half several days so far in early March, and data from INRIX showed shopping mall visits in Seattle plunged 28 percent on Saturday 3/7/20, and another 26 percent the following day.[1] INRIX also completed analysis comparing the percentage change in speeds on major roadways in the metro areas with the highest number of confirmed cases of COVID-19 as of 3/10/20: San Francisco, Seattle, New York City, Los Angeles, and Boston.[2]  The chart below illustrates the impact in Seattle, where there was a 30 percent increase in average travel speeds during the 8:00 am to 5:00 pm peak commute times on the first day of Amazon and Microsoft’s work from home policy was effective.[3] Source:  https://inrix.com/blog/2020/03/coronavirus-commute-trends/. The Financial Times published data on the impact to traffic and congestion in China during the height of the outbreak.  The data is based on data provider Wind, and the index is a ratio of peak to non-peak travel times – as readings exceed the value of 1, the longer it takes to travel the same distance within the 100 cities tracked during rush hour.   Traffic congestion typically falls during the Lunar New Year holiday, but this year the ratio dropped to a record low and has not substantially recovered.[4] Recently released data on the combined January-February 2020 economic data for China shows growth plummeted across all sectors.  Retail sales fell 20.5 percent, and industrial production falling 13.5 percent, a larger decline than it experienced during the Great Recession.[5]  It’s also believed that the data could actually get worse, because despite the fact that China has emerged from the coronavirus, it’s combined January-February results may be understating a much more significant decline, as the country-wide shutdowns didn’t occur until late January.[6] Unfortunately, this comes also at a time when gasoline prices have fallen – the average price of gasoline per the U.S. Energy Information Administration has fallen to $2.248 per gallon the week of 3/16/2020 from $2.561 at the beginning of the year. This represents a nearly 14 percent drop, compared to a 47 percent drop between the price per gallon as 12/31/2007 to the lowest price $1.642 per gallon during the recession 12/28/2008.  With the price of U.S. crude oil plummeting to a four-year low of $27 per barrel, energy companies are just one more industry experiencing significant challenges.[7] Numerous economists have already predicted the U.S. economy will contract in the first quarter, and experience slower growth in second quarter, and remainder of 2020.  Estimates for the drop in economic growth range from a decline of 1.6 percent to 2 percent in the first quarter, to a full 5 percent decline for the first half of the year.[8] Source:  U.S. Energy Information Administration, https://www.eia.gov/petroleum/gasdiesel/. Auto claim frequency during and after the Great Recession saw a steep decline.  The number of claims per 100 insured vehicles for collision and liability coverages combined was 4.79 for the rolling four quarters ending Q1 2008 and fell nearly 12 percent to 4.22 claims per 100 insured vehicles for the rolling four quarters ending Q3 2008.[9]  Collision claim coverage alone fell nearly 16 percent from 6.29 claims per 100 insured vehicles for the four quarters ending Q1 2008 to a low of 5.3 claims per 100 insured vehicles for the four quarters ending Q2 2011.  Independently liability claims experienced a nearly 10 percentage decline during that same period. Source: ISS Fast Track Plus™ Personal Auto, As of Sept 30, 2019. As more individuals are forced to work from home and discontinue all trips except those to stock up on essential items, it’s clear we can expect miles driven to plummet, and auto claim frequency to follow suit. Larger decline in new auto sales in the U.S. and globally than originally projected for the year Auto sales in China fell 33 percent in January 2020,[10]  and fell another 79 percent in February 2020.[11]  And a full recovery later in the year is unlikely.   Auto sales in China had already fallen over the last two years, and analysts are projecting sales will be down between 3 and 5 percent versus 2019 sales.[12] In the U.S., analysts are predicting CY 2020 auto sales will fall by as much as 20 percent versus previous forecasts of a 1-2 percent decline for the year.[13]  Largest decline in sales are anticipated in March and April.  Mid-March, the UAW and the Detroit automakers agreed to shutdowns of plants to stop the spread of COVID-19.[14]  Other automakers are continuing to halt production due to the shortage of parts, identification of employees testing positive for COVID-19, as part of broader community/state quarantine efforts[15], or in anticipation of fewer sales in CY 2020.[16] Consumers are shopping less overall – whether in stores or online.  According to the digital marketing firm WITHIN’s “COVID-19 Retail Pulse” sales across numerous categories measured are down.  Using the week of February 18 as the pre-COVID benchmark, their data shows fashion ecommerce revenue and omnichannel revenue were down by 63 percent as of March 16th; pure-play ecommerce was down 46 percent, and revenue for subscription and at-home convenience was up 204 percent.[17]  Amazon announced it was looking to hire 100,000 people to help meet demand; but has said it will only receive vital supplies at its U.S. and European warehouses until April 5th to free up inventory space for medical and household goods deemed essential.[18] Numerous automakers are already offering consumers the ability to delay payments, purchase vehicles with zero-interest loans stretched out over many years or offering to pay monthly payments should a customer lose their job after purchase.[19]  Expect additional programs to be announced as the U.S. government works with the numerous industries experiencing significant decline in sales from the COVID-19 outbreak.  The industry may also see an unexpected bump in sales once the outbreak has been contained.  An unexpected outcome of the SARS epidemic was a 30 percent plus surge in vehicle sales in China in 2003 versus the prior year, as urban populations began to shun public transport.[20] Larger decline in new auto insurance premium related to new auto sales During the Great Recession, private passenger automobile net premiums declined, as auto sales in the U.S. fell, and consumers opted to drop all but the mandatory coverage.  The largest drop occurred within private passenger auto physical damage in CY 2009:  -2.2 percent.[21] If auto sales fall as precipitously as we saw in 2009, private passenger auto premium growth will also be impacted. Longer fulfillment time of certain replacement parts driving up claim and repair cycle times The disruptions in auto parts manufacturing that occurred in China in January and February is expected to result in supply shortages beginning in late March through April and June.  If miles driven fall, this could lessen or delay that impact.[22]  Automakers looking for components for use in production had begun shipping at-risk components via cargo plane, and where necessary, looking for alternative suppliers or manufacturing locales for affected parts.  As automakers come to grips with the real possibility that auto sales will fall, more will look to slow production further. As the virus continues to spread, leading to less driving due to quarantines and desire to limit overall exposure our industry can expect a drop in auto accidents and claims as well.  With the epicenter of COVID-19 now having moved out of China to Europe and the U.S. the overall impact to the global economy will be significant.  We will continue to monitor the situation closely and provide additional updates during this unprecedented time.   [1] https://www.wsj.com/articles/road-and-transit-use-falls-hinting-at-declining-commercial-activity-11584442801 [2] https://inrix.com/blog/2020/03/coronavirus-commute-trends/. [3] Ibid. [4] https://www.ft.com/content/21f3fcce-5a10-11ea-a528-dd0f971febbc [5] Nathaniel Taplin.  “China’s Coronavirus Downturn Is Now Official—and Brutal.”  https://www.wsj.com/articles/chinas-coronavirus-downturn-is-now-officialand-brutal-11584354714?mod=djemheard_t. [6] Ibid. [7] https://www.wsj.com/articles/gasoline-is-cheap-americans-cant-take-advantage-11584523802. [8] https://www.wsj.com/articles/u-s-braces-for-sharp-economic-downturn-as-coronavirus-bears-down-11584386207. [9] ISS Fast Track Plus™ Personal Auto, As of Sept 30, 2019. [10] Graeme Roberts.  “Coronavirus leads to global vehicle sales nosedive.”  www.just-auto.com, 4March2020. [11] Trefor Moss.  “February sales were down 79% from a year earlier, with just 310,000 vehicles sold nationally.”  March 12, 2020.  www.wsj.com. [12] Ibid. [13] Paul Lienert.  “Morgan Stanley sees 9% U.S. car sales dip from coronavirus.”  https://www.autonews.com/retail/morgan-stanley-sees-9-us-car-sales-dip-coronavirus?utm_source=dlvr.it&utm_medium=twitter.   20% decline projection by RBC Capital https://www.wsj.com/articles/coronavirus-threatens-auto-industrys-record-run-of-robust-sales-11584532801. [14] https://www.reuters.com/article/us-health-coronavirus-autos-uaw/detroit-automakers-agree-to-uaw-request-to-shutter-u-s-plants-source-idUSKBN2152Z8. [15] Ibid. [16] https://www.autonews.com/manufacturing/honda-halt-north-american-production-6-days. [17] https://covid19.within.co/covid-19retailpulse/ [18] https://www.nytimes.com/reuters/2020/03/17/business/17reuters-health-coronavirus-amazon-com-exclusive.html?searchResultPosition=6. [19] https://www.wsj.com/articles/coronavirus-threatens-auto-industrys-record-run-of-robust-sales-11584532801. [20] Amy M. Jaffe.  “Concerns Over the Coronavirus Spread to the Oil Industry.”  Council on Foreign Relations, February 12, 2020. [21] III Insurance Fact Book 2019. [22] Rob Merwin.  “Coronavirus hits aftermarket, impacts miles-driven and disrupts Chinese supply channels to U.S.”  March 11, 2020, www.aftermarketmatters.com.

CCC Publishes Crash Course 2020 Trends Report Covering the Automotive, Claims, and Collision Industries

CCC Information Services Inc. (CCC) today released Crash Course 2020, a data-driven report covering the business, consumer, and technology trends shaping the automotive, claims, and collision industries. Crash Course 2020 marks the 25th anniversary of the industry-leading report, which this year explores the future of personal transportation including: AI, ADAS, driverless vehicles, data access, digital consumers, and quality repairs. The 173-page report draws insights based on decades of experience from solutions offered by CCC and its affiliates, including processing 200-million claims-related transactions, 50-billion miles of driving data, and casualty data processes. “CCC’s technology has been connecting the industry for 40 years,” said Susanna Gotsch, director, industry analyst, CCC, and author of Crash Course. “Crash Course provides data-driven insights into the transformational changes the industry is experiencing. Technology like mobile, IoT, and AI have brought dramatic shifts to vehicles and the who, how, why and when of customer engagement. Understanding and streamlining complexities stemming from these new technologies, along with the rising cost of healthcare, data privacy, and climate change is critical to establishing a view of the future of mobility.” Key themes covered in CCC’s Crash Course 2020 include: · Personal mobility – Talk of the end of the auto industry as we know it continues, even as automakers produce products of unprecedented diversity in terms of body styles, engine propulsion, safety and comfort features. · Modern repair capabilities – Today’s vehicles are very different than those manufactured even 10 years ago. Vehicle complexity and industry investment in new repair capabilities are having meaningful impacts on repair cycle time and costs. · Consumer experiences – Rising repair costs, higher total loss frequency and costs, and longer repair times have added pressure to an industry struggling to keep up with consumer demand to turn a disruptive event into an experience that is satisfying. · Data-driven decisions – Despite advancements in vehicle design, crash worthiness, and crash avoidance technologies, millions of people in the U.S. are injured in accidents each year. Driving and impact data can power advancements in post-collision safety experiences and insurance casualty claims. · Next wave technology – Nobody can predict the future, but we can prepare for it. Technologies once considered futuristic are now being utilized broadly, creating a new foundation for innovation and differentiation. In addition to macro trends and topics, CCC’s Crash Course 2020 trends report also includes industry-level detail on new and used vehicle market dynamics, claims frequency, total loss and repair trends, parts utilization, and much more. Download the full CCC Crash Course 2020 trends report.

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