SAN DIEGO, CA--(Marketwire - November 3, 2010) - Mitchell International, Inc., a leading provider of information, workflow and performance management solutions to the Property & Casualty claims and Collision Repair industries, today released the fourth quarter 2010 edition of its Industry Trends Report (ITR) -- the company's quarterly publication that highlights industry-related trends, news items and statistics.
This edition's Quarterly Feature, "The Trend in Estimate Severity is Part Inflation and Part Parts," by Mitchell's Vice President of Industry Relations, Greg Horn, once again delves deeply into Mitchell's latest collision repair claims data to analyze how inflationary trends by part type impact the collision repair community. Horn analyzes the Mitchell Collision Parts Price Index (MCPPI), a metric similar to the Consumer Price Index (CPI) but created specifically for the collision repair industry, based on the industry's most comprehensive data for the top 20 most-replaced collision parts. Parts represent approximately 42 percent of the average repairable estimate dollars, and therefore have a significant influence on the overall cost of a collision repair estimate.
"Our MCPII data for the first half of 2010 indicates that OEM parts prices have risen while estimate totals have stayed flat, with overall parts spend decreasing as more alternative parts are used due to the substitution effect -- an alternative where insurers and shops choose to repair a part rather than replace it," said Horn. "This year's data reconfirmed 2009's year-end surprise finding that when OEM part prices increase, estimate severity decreases. However, there was a significant difference that impacted all parts prices in 2010: inflation for the first half of the year was modest compared to the steady increase from 2005-2009. As well, in the 2010 timeframe, salvage parts have neither become less available nor more expensive. In fact, Mitchell data shows that the LKQ/used parts price index has actually decreased in the 2009-2010 time span."
Added Horn, "Revisiting the Mitchell Collision Parts Price Index at the end of 2010 provides the collision repair industry with the opportunity to understand the relationship between parts prices and inflation, which is critical to ascertaining where estimate severity is trending, in addition to providing us with a clear picture of how the recession continues to influence alternate part selection behavior. Future estimate severity trends will arise from the interplay of parts prices, inflation and general economic conditions, which Mitchell will continue to monitor especially as we move out of the recession."
Other valuable points of interest in the current issue of Mitchell's ITR include:
-
Q3-2010 data reflects an average gross initial Collision appraisal value of $2,748 -- $69 less than this same period last year. Applying the indicated development factor 2.4% suggests a final Q3-2010 average gross Collision appraisal value of $2,814. The average Actual Cash Value (ACV) of vehicles appraised for Collision losses during Q3-2010 was $13,417 -- up significantly from the same quarter in 2009, reflecting strong used car values.
-
In Q3-2010, the average initial appraisal value for Comprehensive coverage estimates processed through Mitchell servers was $2,505 -- compared to $2,521 in Q3-2009. Applying the prescribed development factor of 2.2% for this data set produces an adjusted value of $2,561 -- a $40 increase from this same period last year. Q3-2010's average appraised vehicle value (ACV) for comprehensive losses was $13,404 -- an increase of $1,562 over vehicles appraised during this same period in 2009.
Complete content is available in the latest Industry Trends Report, which may be downloaded in PDF format by visiting www.mitchell.com. First published in April 2001, Mitchell's Trends Report has grown in both content and circulation, now reaching more than 23,000 collision and casualty industry professionals.
About Mitchell International, Inc.
Mitchell International (www.mitchell.com) is a leading provider of information and workflow solutions to the Property & Casualty claims and Automotive Collision Repair industries. The company's comprehensive solution portfolio streamlines the entire auto physical damage, bodily injury and workers' compensation claims processes. Mitchell enables millions of electronic transactions between more than 30,000 business partners each month to enhance partner productivity, profitability, and customer satisfaction.