What does the future hold for property and casualty claims and collision repair? One company with a big stake in the P&C sector looks at the data and offers insurers a glimpse into 2014.
A shift in operational efficiency as new technology and resources improve processes is one prediction made by Mitchel, a provider of technology, connectivity and information solutions to the P&C claims and collision repair industry.
“As the amount of data rises throughout the property and casualty and collision repair industries, more organizations will find ways to leverage this information to improve operations and contain costs," says Greg Horn, vice president of industry relations for Mitchell. “The rate of data coming in is too large and too fast to ignore, making technology and insights into business intelligence and predictive modeling a top priority for everyone.”
Another expected result from an increase in new vehicle sales and favourable financing will drive down the value of used vehicles, which will in turn affect auto repair and insurance, claims and payer ecosystems, adds Horn.
The broad industry and specific predictions from the company's core auto physical damage, auto causality and workers' compensation divisions include:
Predictive technologies will improve cycle time, outcomes and customer satisfaction
P&C payers will look to leverage the vast quantities of data to help improve operational efficiencies and reduce claim costs. (continued.)
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The ability to easily integrate and access business intelligence and predictive models will be at the top of the priority list, with many P&C payers planning to upgrade outdated technology in 2014. Integrating business intelligence in existing applications and processes, such as bill review, will allow payers to gain insight and take action to automate workflow, measure provider performance and outcomes, and mitigate claims with the potential for high severity or narcotics abuse.
Triaging and predictive technologies will begin to deliver more demonstrable results as these resources mature and the industry harnesses the power of Big Data. As an example, by leveraging key models, insurers can more effectively identify cases with elements of fraud that can be transferred to Special Investigative Units.
U.S. healthcare reform will add more competition along with delays in the P&C market
Looking south of the border, providing insurance to a million uninsured and expanding Medicaid eligibility all at one time will likely cause an impact in P&C. Potential delays and gaps in treatment will occur when the same amount of providers and healthcare delivery are available to serve medical needs of so many new patients introduced into the healthcare system. Additionally, the use of PPOs will accelerate as more patients gain access to primary care physicians within plans as the first line of treatment and referral. (continued.)
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Total loss claims will increase
Robust new vehicle sales will continue to cause used car values to soften. As North American new vehicle sales volume is on record to exceed 16 million new sales (back to pre-recession levels), the value of used vehicles will suffer because of easy new vehicle finance terms. This, combined with a spike in lease return vehicles, will result in a higher percentage of claims resulting in total losses.
Recovering economy will spark higher labor rates
Retail hourly labour rates for body labour as well as paint and materials costs will rise, as the cost of acquisition of qualified technicians and the paint and materials from suppliers rise. The recession helped delay increases in hourly labor rates charged by collision repair shops, but rising costs for materials, healthcare and other costs of business will force shops to raise hourly rates.
Workers' Compensation industry will struggle to manage cost shifting and over utilization
As attention on provider performance increases, particularly with respect to Opioid drugs and physician-dispensed drugs, workers' comp insurance payers have a challenge of keeping pharmacy-related costs down. Therefore, pharmacy benefit management will play an increasing role in the overall cost containment program and solutions that provide analytics on provider performance will become vital.
Additionally, managing the cost of durable medical equipment (DME) will be a hot topic in 2014 due to increasing costs and potential overuse. Payers will be challenged to control the escalating costs associated with these medical devices. DME, implant and other ancillary network services will play an increasing role in the overall cost containment program for payers as costs for these items continue to escalate.
