With drivers spending less time on the road amid the coronavirus lockdown, what impact did that have on vehicle accidental damage claims?
Research by brokerage giant Willis Towers Watson and Audatex UK has revealed that while the number of claims dropped, repair costs rose. The research shows that during the 12 weeks prior to lockdown, the average repair cost estimation was around £1,850, but in the first three weeks of April it topped the £2,000 mark, which coincided with a sharp rise in component costs. The conclusion is that the abnormal increase in net average costs reflects that it was primarily non-driveable vehicles that were being prioritised for repair by insurers and repair body shops during this period.
Perhaps the most surprising statistic is that there has been a significant reduction in what motor insurers and networks call “key to key” time – the time it takes for the car to be returned to the customer fully repaired.
Working from the initial repair decision-making date to when an invoice is generated, the ‘key-to-key’ time has historically averaged at over 10 days,” said one leading industry insider. “During the lockdown, however, this timeframe has on average dropped below five days. This is particularly impressive when considering much of the work relates to more severely damaged vehicles that are typically more complex and time-consuming repairs.”
Analyzing how the timeframe from incident date to return of vehicle to customer radically reduced on average by five days is likely to be high on most insurers’ list. So did temporary repairs simply play a key part or might it actually be feasible to deliver this faster time frame as a new service benchmark in the long term, will be upmost in the minds of many insurers?