March 9, 2015 by Canadian Underwriter
Mitchell International, a provider of technology, connectivity and information solutions to the property & casualty claims and collision repair industries, has found that bodily injury (BI) claims payments in the U.S. are increasing faster than other lines of coverage, particularly for third-party claims.
The finding was included in Mitchell’s Industry Trends Report Q1 2015, Casualty edition, released on Thursday along with the Auto Physical Damage edition. The Casualty edition noted that the p&c insurance industry faces many challenges, ranging from rising operating costs to an increasingly complex regulatory environment. [click above image to view reports]
In the report, Chris Williamson (pictured right), product manager for the Auto Casualty Solutions division at Mitchell, addresses the evolution of BI payment and claims. “Over the past few years, BI payments have increased at a significantly higher rate than Personal Injury Protection claims,” said Williamson. “Third party claims also impact adjusters, who may struggle with the volume of claims, along with performing negotiations. Across the industry, adjusters rely on a number of tools in addition to their own experience in negotiating bodily injury settlements.”
Williamson added in the report that taking a deeper look into the challenges facing p&c insurance adjusters uncovers additional issues around third-party claims. “Non-integrated evaluation of medical specials is one example,” he wrote. “These report-based evaluations can be challenging to utilize because of the volume of information presented, along with the difficulty in applying additional interpretations on top of the initial evaluation. As a result, some facts that could be valuable to an adjuster are underutilized or ignored when moving into the negotiation process.”
The Auto Physical Damage report noted that recent economic growth in the United States has had an impact on a variety of areas within the industry, most notable in the increase of auto sales from each region. However, in the report, Greg Horn, vice president of industry relations at Mitchell, outlines other areas that have seen the effects of a shifting economic status.
“There were a significant number of events in 2014 capable of affecting the prices of both OEM and alternate parts,” Horn (right) wrote. “Interestingly, the strengthening of the U.S. dollar against the Taiwan New Dollar (the key currency for most aftermarket parts) did not have the same impact. In this instance, the index rose at the same time the U.S. dollar strengthened. I believe this is due to the increase in the selection of ‘premium’ aftermarket parts by insurers and collision repairers.”
First published in April 2001, Mitchell’s industry trends reports reach more than 33,000 collision and casualty industry professionals and provide visibility into data-driven trends in the p&c market.