Canadian Underwriter

Collision severity, supplements use and OEM parts use in Canada all trend downwards in 2011 Q1: Mitchell

May 9, 2011   by Canadian Underwriter

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Average appraisal values for overall severity, the percentage of supplements prepared by estimators and the use of Original Equipment Manufacturer (OEM) parts all trended downwards in 2011 Q1, according to the latest Mitchell Industry Trends Report.
In contrast, the use of aftermarket parts, labour costs and paint and materials rates all started to increase, on average.
In the ‘Canadian Collision Summary’ part of the Mitchell report, the average gross appraisal value in 2011 Q1, measuring overall severity, was $3,085 – a 52% decrease from 2010 Q1.
Collision severity in Canada similarly fell. The average gross collision appraisal value decreased from $3,209 in 2010 Q1 to $3,138 in 2011 Q1.
The percentage of supplements was down in 2011 Q1.
“In Q1-2011, 35.84% of all original estimates prepared by Mitchell-equipped Canadian estimators were supplemented one or more times,” Mitchell notes. “In this same period, the pure supplement frequency (supplements to estimates) was 69.7%-reflecting a significant decrease from Q1-2010.”
The use of OEM parts in repairs also trended downwards. Canada OEM use in 2011 Q1 was at 71.5%, down from 73.3% in 2010 Q1, and well below the 75% seen in 2010 Q3.
In contrast, the use of aftermarket parts in Canada rose by more than a percentage point – from 11.9% in 2010 Q1 to 13.4% in 2011 Q1.
Average body labour rates increased in most provinces and territories in 2011 Q1. The biggest change was in British Columbia, where the average hourly rate went from $52 to $55.68. The Northwest Territories saw the next largest increase, from $77.59 to $79.44. All other provinces showed labour rates as either flat or between a 1% or 2% change.
Paint and materials, which make up 9% of Mitchell’s average appraisal value, increased from $32.27 in 2010 Q1 to $33.01 in 2011 Q1.

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