drp best practices - audatex and offer best practices for keeping up with the changing trends. ......
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AudatexDirectionsNews from Audatex North America, Inc. Vol 01
ALSO IN THIS ISSUE
> Collision Repair and Total Loss Trends Data
> Shop View: Paint Refinishing
> Regulatory Highlights
DRP Best Practices Driving Customer Satisfaction and Improving Performance
DRP Best Practices Driving Customer Satisfaction and Improving Performance
Audatex Directions is a quarterly newsletterthat provides in-depth trends and industryanalysis on the auto physical damagemarket. It is published by Audatex NorthAmerica, Inc., the only true global providerof claims solutions—active in more than 50countries across six continents.
Editor
Kendra DeWittCorporate Communications Manager
Contributing Writers
Michael AndersonDiane KlundBeth McAteerEileen SottileRick Tuuri
To request a printed copy of this publication,please email:
Kendra [email protected]
To download the pdf, please visit ourwebsite: www.audatex.us/audatexdirections
Local focus. Global knowledge.
Audatex is the world leader in thedevelopment and implementation ofsoftware and services for the automobileand insurance claims processing industry.As part of the Solera group of companies,we draw on our broad global claims marketexperience to identify and implement thebest-practice processes that drivecontinuous improvement for our localcustomers and their trading partners.
© 2008 Audatex North America, Inc. All rights reserved.Audatex, AudaInsight, Autosource, Audatex Estimating,Audatex Win-EMR, PenPro and Shoplink are trademarks orregistered trademarks of Audatex. All other trademarksused are the property of their respective owners.
ContentsManaging Director’s Message
Feature Article
DRP Best Practices
Total Loss Percent of Appraisals
Declines for Third Consecutive Year
Shop View
Paint Refinishing
Regulatory Highlights
Quality Parts Coalition Continues
Charge to Preserve Competition in
Collision Parts Industry
Trends Data
Collision Repair and Total Loss
Audatex News and Events
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Audatex Directions
Welcome to the first issue of Audatex Directions.
As the world leader in the development and implementation of automotive claims
solutions, we’re in a unique position to bring you our global claims market experience and
best practices—helping you drive continuous improvement within your organization. We
created Audatex Directions as a vehicle to deliver this information to you. In each issue,
we’ll provide you with the latest industry and market statistics—explaining how these
trends will affect your business. We’ll also feature articles that highlight the knowledge
gained from our customers, those in the U.S. and Canada as well as abroad.
By covering recent industry developments and important issues that the North American
and overseas markets face, we can shed some light on potential implications for our
markets, and offer best practices for keeping up with the changing trends. For example,
this month, we present a best practice from the United Kingdom on Direct Repair Program
management. Allianz Insurance plc, a top 10 carrier in the U.K, is applying some
innovative techniques and along with their repair facility partners, are reaping the rewards.
As you know, Audatex is fanatical about delivering solutions that provide results, and
we’re always looking for ways to leverage our global best practices in local markets. In
fact, our domestic and international executives from around the world recently met in New
York City for important roundtable meetings to share best practices and discuss global
trends and strategies. And while there, we took a break to celebrate the third anniversary
of our holding company, Solera Holdings, Inc., on January 17 by ringing the Opening Bell
at the New York Stock Exchange.
As we prepare for the next issue of Audatex Directions, I look forward to continuing our
collaboration, strengthening our partnerships and sharing in our mutual successes.
Together, we can transform the automobile claims industry.
Warm regards,
John KotsopoulosManaging DirectorAudatex North America, Inc.
1www.audatex.com
‘‘’’
…we’re in a unique
position to bring you
our global claims
market experience
and best practices…
Managing Director’s Message
2 Audatex Directions Vol 1
Continued next page
Want to know whatcustomers want? A well-executed direct repair program (DRP). The J.D.Power and Associates 2006 Collision RepairSatisfaction Study finds that customer satisfactionwith U.S. insurance carriers is 9% higher when aninsured goes to a collision repair facility affiliated withan insurer DRP.
Higher customer satisfaction means a higher bottomline for insurance carriers. J.D. Power reports thatcarriers achieving high levels of satisfaction retain90% of their customers. Yet carriers with the lowestsatisfaction levels retain an average of only 78% ofcustomers. And the J.D. Power and Associates 2007Insurance Shopping StudySM finds that 33% ofconsumers who shop because of price ultimatelyswitch carriers, while nearly 75% of consumers whoshop because they have experienced poor customerservice switch carriers.
These same lessons can apply internationally, andsome best practices surfacing abroad can apply herein the U.S. and Canada. Allianz Insurance, a leadinginsurer in the U.K., bases its direct repair program ona unique approach that drives significant benefit for allinterested parties—Allianz, its collision repair facilitypartners and its customers.
DRP Best PracticesDriv ing Customer Sat is fact ion
and Improv ing Per formance
Feature Article
business. Ourprogram identifiesshops that help ustake waste out ofthe workflow—weshare the benefitswith them. It’ssimple really. If ashop’s business is wellaligned with our business,then it’s good for both of us. And, if it’s not,then maybe we shouldn’t be doing businesssince it can hurt us both. That’s not to say wedon’t work hard with shops that are willing toimprove. We share the data and bestpractices to facilitate improvement.”
The Payoff for AllianzSince the program’s adoption several yearsago, Allianz has seen improvement in all fourareas—delivering a significant financial returnfor both Allianz and its better-performingrepair facilities. Allianz reports that theaccuracy of first-time estimates hasimproved—with accuracy ratings for manyrepair facilities now in the high 90s. Allianzfinds that increases in estimate accuracy drivedown processing costs and reduce servicedelays for customers. Process efficiencyimprovements have minimized paperworkerrors and the associated labor expense,unnecessary communication and delays inauthorization and payment.
Cycle time is down four days, reducing thecost of rental car fees, improving repairfacility throughput and getting repairfacilities paid quicker. And, according toAllianz, its own customer satisfaction scorehas climbed into the 90% range, withhealthy retention and recommendationrates.
“Our program has been successful atdelivering benefits to our shops, ourcustomers and us, but we continue to refineand improve it,” Brailey adds. “It’s an integralpart of how we sustain our competitiveadvantage.” n
3
Allianz Insurance Partners with CollisionRepair Facilities for a Win-WinJoint accountability and joint benefits serve ascornerstones for the Allianz Insurance DRP. Theprogram, in place for several years now, is a keyto Allianz’s success in the market.
“To control severity expense, you’ve got to workwith shops by sharing the accountability and,ultimately, the benefits,” says Phil Brailey, MotorDamage Supplier Manager for Allianz Insurance.“Trying to control costs otherwise is likesqueezing a balloon. Tighten down in one placeand it bulges out somewhere else.”
The program aligns Allianz interests with thoseof its repair facilities and its customers. Here’show it works:
• Allianz assesses the performance of eachrepair facility using a balanced scorecard thatmeasures four mutually reinforcingcomponents of the claim process: EstimateAccuracy, Process Efficiency, Cycle Time andCustomer Satisfaction (see sidebar).
• Allianz develops a single overall score foreach participating repair facility using thesefour criteria.
• Allianz then assigns the repair facility to one of five performance tiers based upon itsoverall score.
“Initially there was a mixed reaction from ourshops to the performance tiering,” says Brailey.“The most professional shops are generally keento try new ideas if there is a chance to benefittheir business. Over time, slower adopters havejumped aboard after seeing the benefits to their
Reinspection ProgramsRegardless of when in the appraisal process areinspection occurs, these programs are designed toimprove the overall quality of the appraisal processthrough detailed monitoring and evaluation of theestimate. Reinspections provide an objective assessmentof the accuracy and quality of the appraisal—furtherenhancing the effectiveness of DRP programs.
Reinspection products also zero in on training needs forboth technical and service resources, close technical andservice gaps, and isolate correction activities necessarybefore vehicles are complete and settlements are final.
The Alliance DRP Scorecard:Measuring CollisionRepair FacilityPerformanceEstimate Accuracy –The difference betweenAllianz’s estimate and the repairfacility’s estimate. Allianz’s goalis to reduce variance betweenthe two estimates. Allianzmeasures both overpaymentsand underpayments, relative toan estimate written by Allianzon the same vehicle.
Process Efficiency –The percent of error-freedocuments submitted byparticipating repair facilities.Errors can range fromincomplete or inaccurateadministrative information, to poor-quality photos, toinsufficient notes.
Cycle Time – Reduced anaverage of four days per claimthrough the DRP program. Foradditional benefits andenhanced monitoring, Allianzrecently introduced AudaInsightto their repair facilities.Audatex’s web-based, claimtracking system allows datasharing among repairer, insurerand policyholder.
Customer Satisfaction –Allianz tracks customersatisfaction closely andprovides repair facilities with detailed feedback.
Feature ArticleCont inued f rom prev ious page
4 Audatex Directions Vol 1
Total Loss Percent of AppraisalsDeclines for Third Consecutive Year
Did you know that in the U.S., the total losspercent of appraisals declined 15% from2004 to 2007? While the trend continues, itmoderated between 2006 and 2007. You canfind some of this information and otherimportant total loss trends insight inAudatex’s Total Loss Trends 2001 – 2007 Q1-Q3 paper, published in November 2007.
The paper covers potential drivers of the riseand fall of the total loss percent of vehicleappraisals from 2001 to Q3 2007, includingrepair costs, used vehicle price variation,new vehicle incentives, fleet sales and off-lease vehicle volumes as well as additionalanalysis of year-end data.
Other findings in the paper include:
• From 2001 to 2007, repairable vehiclegross appraisal values rose 16% or $323,while total loss average market valuesclimbed 11% or $762.
• During the 2001 to 2007 period, total lossvehicles under seven years old increasedtheir share in both units and dollars.
• As a percent of total loss appraisals, theftsaccounted for 3.25% in 2007, a 22%decline since 2004.
Audatex is committed to providing insightfulinformation, analysis and knowledge-basedsolutions that help companies better managetheir businesses. To download a copy ofTotal Loss Trends 2001 – 2007 Q1-Q3,please visit our website, www.audatex.us/whitepapers/loss.pdf n
Download Audatex’s TotalLoss White Paper by goingto www.audatex.us/whitepapers/loss.pdf
5www.audatex.com
Blend vs. Blend within a PanelBy definition, “blend” is the application of colorinto an undamaged adjacent panel to facilitatethe appearance of color match, with applicationof clear to the entire panel. “Blend within apanel” refers to painting within panel boundariesusing the blend technique, as opposed toblending into an undamaged adjacent panel.
Several years ago, information providersintroduced automated formulas for the blend refinish operation. Since the automatedformulas were designed to address “blend” and not “blend within a panel,” estimates can sometimes involve the misuse of theautomated blend formula.
However, using Audatex’s estimating system,you don’t have to worry about this. Audatexhelps users write an accurate estimate throughautomated intelligence. Since 2002, AudatexEstimating™ has not allowed the selection of the“blend” operation when “blend within a panel” isrequired. The user may enter a refinish time via amanual entry.
In addition, the Audatex system prevents theselection of the automated blend formula on thefirst panel in an estimate. It also prevents theselection of “blend” when a panel has beenrepaired or replaced. The blend formula doesn’tapply to the first panel selected because, bydefinition, blend is an extension of paint from apainted panel into an undamaged adjacentpanel. Therefore, some panels must first berefinished before you can blend into another.
Audatex Estimating also prevents the use of theautomated blend formula for panels that havebeen replaced, because if a panel is replaced, itisn’t an undamaged adjacent panel. It may be acandidate for full refinish or a manual entry(judgment time), but not automated blend.
Finally, when a panel has been repaired, it isn’tan undamaged adjacent panel. Therefore, theautomated blend formula doesn’t apply to arepaired panel. Audatex also preventsautomated blend in this situation.
Currently, when “blend within a panel” is required in collision repair, this is consideredjudgment time and the time must be provided bythe estimating professional. When a panel isrepaired, the repair judgment time is alsoprovided by the estimating professional. If theAudatex refinish time is selected for full painttime, the system assumes that the panel hasbeen returned to the condition of a new,undamaged panel.
Featheredge, Filland BlockThe collision industry recently endorsed astatement acknowledging that “featheredge, filland block” are legitimate operations that applyto the repair process and should be addressedby the estimating professional at the time ofestimate creation. While repair judgment times inestimates may include these operations, industryexperts suggest that many would like to see aseparate line item on an estimate to addressfeatheredge, fill and block, as paint andmaterials may be affected. An automatedsolution, however, is not yet available. Therefore,this operation needs to be assessed by theestimating professional and agreed upon by theinsurer and repairer. n
Paint RefinishingPaint has been a key topic at industry events, including the
recent Collision Industry Conference (CIC) held in January. Some
of the most hotly debated topics discussed include blend within
a panel and featheredge, fill and block.
Shop View
6 Audatex Directions Vol 1
This year's Insurance Regulatory ExaminersSociety Market Regulation School will be held atthe Red Rock Resort in Summerlin, Nevada,beginning April 13. This national meeting is anexcellent opportunity for claims and complianceexecutives to hear from regulators on marketconduct issues in their states, and network with
other compliance officials. The conferenceprovides access to state regulators in groupsessions and one-on-one meetings. For moreinformation on registration and to view thisyear’s agenda, visit www.ires-foundation.org. n
IRES Foundation to Hold Market Regulation School April 13-15
Rhode Island’s legislature has been busy againthis year with automotive insurance bills. Belowis a partial listing of newly enacted laws.
Senate Bill 862/House Bill 6203 requires thatan owner of a vehicle with damage exceeding athreshold of 75% of the vehicle’s fair marketvalue for vehicles newer than seven model yearsmust obtain a salvage title. Fair market value isset forth in any nationally recognized compilationof retail values, including automated databases.
Audatex’s estimating platform enables clients to set a warning at client-established thresholdsto assist insurers in complying with salvagetitling laws.
Senate Bill 516 requires insurers and collisionrepair facilities to provide written notice to avehicle owner that they are entitled to eitheroriginal equipment manufacturer parts or non-original parts in the repair of motor vehicle bodyreplacement parts for any automobile less than30 months beyond the date of manufacture.
PenPro®, Shoplink, and Audatex Estimating™have been updated to meet the legislation’sJanuary 1, 2008 effective date. They nowinclude the required aftermarket partsdisclosure, along with the current requiredchoice of repair facility disclosure.
Governor Carcieri’s veto of Senate Bill 5549was overridden by the state legislature. Thenewly enacted law makes it an unfair practicefor an insurance company to modify a repairmanual or automated appraisal system withoutprior agreement between parties. It’s alsoconsidered an unfair practice to not follow all ofthe components for a manual or system, or torefuse to compensate a collision repair facilityfor paint and refinish materials as documentedin industry-recognized software systems.
Audatex’s vehicle-specific, option-drivenestimating facilitates compliance by includingthe necessary operations for repairs in an estimate. n
Rhode Island Legislature Busy with Automotive Bills
AudatexRegulatoryContactFor additional informationon regulatory issues orquestions on state lawsand regulations governingauto physical damageclaims, please contactDiane Klund, AudatexRegulatory ComplianceManager, by phone, (775) 824-0502, or email,[email protected].
Here is the latest regulatory news from around the U.S.,
compiled by Audatex’s regulatory and legal compliance team.
Regulatory Highlights
7www.audatex.com
In August 2007, the California Department ofInsurance conducted a second workshop toaddress stakeholder concerns related to paintand material “capping.” The Department definescapping as placing an arbitrary and artificiallimitation on the payment for the cost of paint and materials charged by the collisionrepair facility.
The Department acknowledged that, byconvention, the collision repair industrycalculates the amount charged for paint andmaterials used in a repair by multiplying thepaint labor hours by a specified hourly paint andmaterials rate. Repairers generally agreed thatthe paint labor hours multiplied by a materialsrate provides, on average, an adequate paymentfor paint materials.
While many repair facilities were opposed to thepractice of limiting the amount of paint materials,some insurers argued that use of a threshold asa guideline can facilitate discussions betweenappraisers and repairers on a fair amount ofcompensation. The Department expressedconcern that insurers were switching methodsbetween the labor formula and invoice methodwhen asking for invoices to support costs abovea certain threshold.
The CaliforniaDepartment ofInsurance is initiatinginternal discussions onhow to resolve thisissue, and will make arecommendation toCommissioner StevePoizner. Audatex willcontinue to keep youapprised of any furthercommunication on thisissue from the Department.
In a related action, the New JerseyDepartment of Banking and Insurance hasissued Bulletin No. 07-20 concerningallowances for paint and materials. In ameeting in November in Trenton, regulatorsexpressed to Audatex that the commonlyused formula of paint labor hours multipliedby a paint and materials rate is compliant withNew Jersey regulations and the intent of theBulletin. Insurers must use a fair materials rateand be ready to document their calculationsto the Department if required to do so. n
Paint “Capping” and Materials Costs:California and New Jersey
Audatex is pleased to announce that after anextensive review, Autosource total lossvaluations were accepted by the New HampshireDepartment of Insurance. These valuations areconsidered a statistically valid process fordetermining total loss settlements as requiredunder the newly revised regulations that becameeffective on October 1, 2007.
The approval of Autosource valuations involvedan exhaustive review of documentationsupporting their accuracy, and further validatesthe accuracy of the Autosource methodologyused throughout North America.
In addition to providing fair and comprehensivestatistical valuations in New Hampshire,Autosource also provides exception valuationsutilizing two verified comparable vehicles, or three dealer quotes as required in the revised regulations.
For information on the new regulations, visit theNew Hampshire Insurance Department website at www.nh.gov/insurance.
Autosource provides valuations that meet the regulatory requirements in all 50 states, the District of Columbia, Puerto Rico and Canada,and is approved in all states specifically requiringapproval of total loss valuation methodologies. n
Autosource® Valuations Approved by the NewHampshire Insurance Department
Regulatory TipTo help our clients meetregulatory requirements touse the correct underwritingcompany name on claimsdocuments, Audatex offersthe following solution tocapture the correct name onAutosource valuations.
You can utilize our customadmin feature to capture the underwriting companyname and place it on thevaluation. To do this, youcan pull in the custom adminfield via Audatex Estimating™
and, during manual entry,ensure that all Autosourcevaluations contain thecorrect company name.
Autosource can also makethis a mandatory field. In addition, you may pre-populate the custom adminfield from the assignment(you must use an existingcustom admin field onAudatex Estimating such as the company name) or fill it in manually.
Contact your AutosourceRepresentative for more information.
Regulatory HighlightsCont inued f rom prev ious page
8 Audatex Directions Vol 1
The Quality Parts Coalition (QPC) was created topromote legislation that establishes a “repairclause” in U.S. design patent laws. With thisclause, the manufacture and sale of alternativecrash parts for the purpose of repairing anautomobile is not considered an act ofinfringement. However, without the “repairclause”, automakers can eliminate competitionfor collision parts through the enforcement oftheir design patents against the manufacturersand distributors of quality alternative parts.
In its effort to promote “repair clause” legislation,QPC—along with consumer groups andinsurers—has presented its case to members ofthe House Judiciary Subcommittee onIntellectual Property (“IP Subcommittee). The IPSubcommittee, which has jurisdiction overdesign patent law, decided that the issuewarranted a place in its February 14congressional hearing and expanded the hearing
on design protection issues to include autocollision parts.
The pro-“repair clause” side at the hearing was well represented by the ConsumerFederation of America (in conjunction withPublic Citizen, Consumers Union, the Centerfor Auto Safety, and Advocates for Highwayand Auto Safety). CFA focused on the anti-competitive effects of design patentenforcement on the crash parts, the harm toconsumers and the resulting need for a “repairclause”. The Alliance of AutomobileManufacturers, on the other hand, presentedan opposing view that permits automakers toenforce their design patents on crash partsthrough the International Trade Commission.
During the hearing, numerous questions aboutthe design patent enforcement issue wereasked by a variety of key IP Subcommitteemembers, including Ranking Member HowardCoble (R-NC), Rep. Adam Schiff (D-CA) andRep. Brad Sherman (D-CA).
In the future, QPC will continue working withthe IP Subcommittee, as well as with othermembers of the U.S. Senate and House ofRepresentatives, as it promotes legislation toestablish an automotive "repair clause".
To read the full testimony by Jack Gillis of theConsumer Federation of America, and pressreleases in support of a “repair clause” byallied industry and consumer organizations,visit the Quality Parts Coalition website:www.qualitypartscoalition.com/press/press_events.html. n
Quality Parts Coalition ContinuesCharge to Preserve Competitionin Collision Parts Industry
9www.audatex.com
Collision Repair and Total LossTrends Data Provides Insight on North American Market
Trends Data
The following U.S. and Canadian collision repairand total loss appraisal information is providedby the Audatex Database. Featuring more than20 years of data, the Database offers keyinformation compiled and reported throughAudatex WinEMR™ for repairable vehicleappraisals, and Autosource® for total lossvaluations. Insurance carriers, collision repairfacilities and independent appraisers uploadindustry-wide appraisal data to the AudatexDatabase through Audatex’s estimating and totalloss applications.
U.S. Industry RepairableVehicle TrendsSeverityIn 2007 Q4, the average U.S. repairable vehiclegross appraisal value (GAV) was $2,481. 2007Q4 was up over 2007 Q3 following the seasonalpattern, and higher than the prior year quarter,2006 Q4.
In 2007 Q4, among the top third of states withthe highest population based on U.S. Censusestimates in 2006, New Jersey, New York,Arizona, Washington and Florida have thehighest GAVs and North Carolina, Virginia andMassachusetts have the lowest GAVs. Amongthese high-population states, New York,Pennsylvania and Washington experienced thegreatest 2006 Q4 to 2007 Q4 increase in GAV,while Ohio, North Carolina and Floridadecreased the most.
Continued next page
Audatex Directions Vol 1
Appraisal ContentIn 2007 Q4, the average appraisal consisted of$1,040 worth of labor, $1,004 in parts, $199 inpaint and material, $105 in sublet and $133 inother expenses.
Across the nine-quarter period, both parts andlabor averaged 41% of GAV, with paint andmaterial at 8% and both sublet and other at5% each.
LaborIn 2007 Q3, for the first time averagemechanical/electrical repair hourly labor ratespassed the $65 mark, but then dropped back totrend in Q4. Frame and refinish hourly laborrates continued their steady rise, while sheetmetal rates flattened.
The composition of labor dollars by labor typeremained fairly stable across the past ninequarters with an average of 56% coming fromsheet metal, 35% refinish, 6% mechanical/electronic and 3% frame repair. Yet in 2007 Q4,refinish and sheet metal received a higher thanusual share.
Trends DataCont inued f rom prev ious page
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www.audatex.com
PartsIn 2007 Q4, the average repairable vehicleappraisal included $691 worth of OEM parts,$142 of LKQ parts, $108 of aftermarket newparts and $53 of aftermarket reconditioned orremanufactured parts. Compared to 2006 Q4,OEM and LKQ parts were both down 3%,while both aftermarket new parts andaftermarket reconditioned or remanufacturedparts were up 5%.
SupplementsDuring the past nine quarters, the averagesupplement amount peaked in 2006 Q1 at $680and hit bottom in 2007 Q2 at $656. 2007 Q4average supplement amount was 2% below2006 Q4.
The percent of appraisals with a supplementpeaked cyclically in 2006 Q1 and hit its high in2007 Q1. The supplement percentage wasstable for the past three quarters.
Trends DataCont inued f rom prev ious page
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U.S. Industry Total LossVehicle TrendsTotal Loss Severity and Percent of AppraisalsOver the past nine quarters, the total lossaverage market values (AMV) trended upwards,with a cyclical spike in Q3 that coincides withthe new model year vehicle launch season andthe end of dealer summer clearance sales.
The total loss percent of appraisals is declining.In 2007, the percentage was below its prior yearquarter for three quarters and at the same levelin the remaining quarter. 2007 Q4 is the lowestfourth quarter in three years.
Trends DataCont inued f rom prev ious page
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13www.audatex.com
Total Loss Vehicle Severity and CompositionNewer model year vehicle AMVs show moreseasonality than older vehicles. One potentialdriver is the third quarter seasonal increase infleet vehicle auction volumes.
For percent of total loss vehicles by vehicle age, there is a clear pattern among currentmodel year vehicles. They increase from prioryear Q4 through current year Q3, and declinesharply in Q4.
In 2007 Q4, domestic total loss vehicle AMVs were up 2.8% over 2006 Q4, followed by Asian vehicles up 2.6%, while Europeanvehicles were down 0.3%. Comparing 2007 Q4 to 2007 Q3, Asian, domestic and Europeanvehicle AMVs were all down, 0.4%, 2.2% and3.0%, respectively.
Trends DataCont inued f rom prev ious page
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14 Audatex Directions Vol 1
Canadian IndustryRepairable Vehicle TrendsSeverityIn 2007 Q4, the average Canadian repairablevehicle GAV was $3,167 (Canadian dollars). In 2007, GAVs increased all four quarters abovetheir respective 2006 quarters.
There is a clear seasonal pattern in CanadianGAVs.
Among Canada’s four most populous provinces,Alberta ranks highest on GAV in 2007 Q3 andBC ranks lowest. Alberta’s fast-rising GAV islikely tied to its oil-driven inflation rate, whichclimbed to nearly twice the national average inthe fall.
Trends DataCont inued f rom prev ious page
Continued next page
www.audatex.com
Appraisal ContentIn 2007 Q4, the average appraisal consistedof $1,113 worth of labor, $1,321 in parts, $226in paint and material, $120 in sublet, and $386in other expenses, which include taxes.
In 2007 Q4, the labor share of GAV was 35%and the parts share was 42%—back on trendafter two quarters of higher than trend levelsof labor.
LaborLabor hourly rates have increased in a stair-stepfashion with the larger increases comingbetween Q1 and Q3. Although rates were up 6%in 2007 Q4 versus 2006 Q4, they were down 1%versus 2007 Q3.
The composition of labor dollars by labor typehas remained fairly stable across the past ninequarters with an average of 57% coming fromsheet metal, 35% refinish, 5% mechanical/electronic and 3% frame repair.
Trends DataCont inued f rom prev ious page
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Audatex Directions Vol 1
PartsIn 2007 Q4, the average repairable vehicleappraisal included $915 worth of OEMparts, $188 of aftermarket new parts, $170of LKQ parts and $34 of aftermarketreconditioned or remanufactured parts.Compared to 2006 Q4, OEM parts,aftermarket new parts and LKQ parts weredown 2%, 3% and 9%, respectively, whileaftermarket reconditioned orremanufactured parts were up 13%.
Over the past nine quarters, the OEMparts share of parts dollars has trended upat the expense of aftermarket new partsand LKQ parts.
Supplements2007 Q4 average supplement amount was up,1% above 2006 Q4 and 2% above 2007 Q3.
After the seasonal pullback in Q3, the percent ofclaims that had a supplement increased to31.5% in 2007 Q4. 2007 Q4 rate of supplementswas 3% lower than in 2006 Q4.
Trends DataCont inued f rom prev ious page
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17www.audatex.com
Canadian Industry TotalLoss Vehicle TrendsTotal Loss Severity and Percent of AppraisalsTotal loss severity has been up for the past fourquarters relative to its comparable quarterly2006 values.
2007 Q4 total loss percent of appraisals was up16% compared with 2006 Q4.
Trends DataCont inued f rom prev ious page
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Total Loss Vehicle Severity and CompositionNewer model year vehicle AMV shows moreseasonality than older vehicles.
The 2007 Q4 mix of 7+-year-old vehicles isconsistent with the 2006 Q4 level—42.0%versus 41.8%, respectively—althoughsignificantly greater than 2007 Q3.
Compared with 2006 Q4, Asian, domestic andEuropean total loss vehicle AMVs in 2007 Q4were all up. Yet compared with 2007 Q3, Asianand European total loss vehicle AMVs in 2007Q4 were both down, with European vehicleslosing more than $100 in AMV. n
Trends DataCont inued f rom prev ious page
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Solera Rings NYSEOpening BellSolera Holdings, Inc., Audatex’s holdingcompany, rang the Opening Bell of the NewYork Stock Exchange (NYSE) on Thursday,January 17—not just to open the StockExchange, but to commemorate its Founders’Day and celebrate a landmark 2007. Audatexexecutives from around the world were onhand to participate in the event. Earlier thatweek, the Company held a series of internalmeetings that enabled its domestic andinternational executives and managingdirectors to share best practices, identifyglobal trends and develop strategies for thecoming year.
“We were excited to celebrate our thirdanniversary and our landmark 2007 byparticipating in the NYSE’s long-standingtradition, the ringing of the Opening Bell,” saidTony Aquila, Solera’s founder, chairman andCEO. “We’re even more excited for thefuture—as we recognize theseaccomplishments and now focus on movingour global strategy forward.” n
RFRs Now Available OnlineRFRs, or Request for Reviews, let you submityour suggestions for updates to the AudatexDatabase. Once your suggestion is received,our database team researches therecommendation and, if necessary, modifiesthe database accordingly. These RFRs arenow posted on the Audatex Online TrainingCenter, www.training.audatex.us. Just login tothe website, go to “Important Information,”and then click on “Pending RFRs”. To helpaddress supplements, changes will be retainedfor 60 days after resolution. n
Following is just a snapshot of the latest news and
events from Audatex North America.
Audatex News and Events
‘‘ ’’We were excited to celebrate our third
anniversary and our landmark 2007 by
participating in the NYSE’s long-standing
tradition, the ringing of the Opening Bell…
20 Audatex Directions Vol 1
We are proud to announce that Audatexsoftware engineer Sanjay Jain recentlyreceived a 2007 Outstanding Dedicationaward from the Collision Industry ElectronicCommerce Association (CIECA). The award,given to CIECA volunteers exhibitingexceptional leadership, contribution anddedication, was presented in November at theCollision Industry Awards Luncheon, part ofNACE.
“CIECA is pleased to honor Sanjay with thisprestigious award,” said Fred Iantorno,CIECA’s Executive Director. “His continuedsupport of our organization, and thetremendous work he has done within our
Architecture Committee, truly distinguish him as anoutstanding 2007 contributor. His hard work isrecognized not only by CIECA executives, but alsoby his peers, who nominated him for this specialdistinction.”
CIECA—comprising repairers, insurers, parts andmaterials suppliers, information and softwareproviders, and other related automotive groups—isresponsible for developing objective, unbiased anduniform electronic commerce standards for thecollision industry. Its Architecture Committeeoversees the technical aspects of creating thesestandards. As a member of this Committee, Jainhas been responsible for maintaining the XMLschemas needed to standardize business-to-business data exchange. n
Audatex Software Engineer ReceivesCIECA Outstanding Dedication Award
Company Now Offers I-CAR Points,Continuing Education Units andAMI Credits for Training CoursesAs a subsidiary of Solera, Audatex isthe industry’s first claims solutionsprovider approved as a member ofthe I-CAR® Industry Training AllianceSM
program. Now students taking theAudatex Estimating™ Instructor-ledtraining class can earn I-CAR pointsvalid towards I-CAR Gold ClassProfessionals® and PlatinumIndividual™ requirements. The two-day Audatex Estimating™ course isworth 3.75 points and the one-daycourse is worth 2.0 points.
In addition, as an Authorized Providerof the International Association ofContinuing Education and Training(IACET)—the highest standardavailable for any continuing educationprogram in the U.S—Audatex can
offer Continuing Education Units (CEUs) for itsprograms that qualify under IACET guidelines.These CEUs are accepted by many colleges anduniversities in the U.S. and Canada and can beused, in some states, to meet collision repaircertification and licensing requirements.
Audatex is also the only claims solutions providerto offer CEUs for its virtual classes through its newASE-certified Continuing Automotive ServiceEducation (CASE) designation. These virtualclasses include Computer-based training coursesand Webinars.
Furthermore, specified Audatex courses nowqualify for credits toward the AutomotiveManagement Institute’s (AMI’s) AccreditedAutomotive Manager designation, an education program that helps collision repairersimprove their business management skills.
For the latest Audatex training information, visit ourOnline Training Center, www.training.audatex.us. n
Solera Receives I-CAR®, IACET, ASE and AMI Training Designations
Audatex News and EventsCont inued f rom prev ious page
North Dakota Autobody Association Trade ShowMandan, ND
Maaco Tech ExpoPrussia, PA
Insurance Regulatory Examiners Society (IRES) Market Regulation SchoolSummerlin, NV
Liberty Mutual Legends of GolfSavannah, GA
Industry Technology/Industry Training (IT) TradeshowAtlanta, GA
Collision Industry Conference (CIC) MeetingScottsdale, AZ
I-CAR® International Annual MeetingScottsdale, AZ
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