Report confirms auto insurers concerns about rising repair costs
Published: September 18, 2018
Canadian auto insurance companies have been increasing rates behind the reasoning claims costs are rising due to increasing collisions and the cost of repair. Private insurers have sought rate increases to offset the costs, while public provider the Insurance Corporation of British Columbia (ICBC) has seen its finances tumble in recent years.
Customer mistrust is commonplace in insurance, correctly or not, so many consumers can be forgiven for thinking insurance companies are just seeking more profits. Still, major carriers like Intact Insurance, Aviva, and RSA insist the car insurance market is becoming increasingly tough.
New data published by Mitchell International suggests insurance companies are correct, collision repair costs in Canada are increasing. The company’s Canada Collision Summary: Q2 2018 report includes data collected from insurance representatives, independent cost appraisers, and information from body shops.
The report “more accurately depicting insurance-paid loss activity, rather than consumer direct or retail market pricing.”
To find the average gross initial appraisal value, Mitchell combined data from first and third-party repair appraisals that were sent through its Canadian Systems platform during the last quarter. The average this year was $3,894, a year-on-year increase of $63 compared to 2017.
Other findings in the report include:
“The average initial gross collision appraisal value uploaded through Mitchell Canadian systems in Q2 2018 was $3,917, a $104 increase from Q2 2017. Factoring for development yields an anticipated increase to $3,980, which represents a $167 increase from Q2 2017.
In Q2 2018, the average initial gross Canadian appraisal value for comprehensive coverage estimates processed through our servers was $4,032, which represents a decrease of $115 compared to Q2 2017. Factoring for development, the anticipated final average appraisal value will be $4,090.
In Q2 2018, our Canadian industry initial average gross third-party property damage appraisal was $3,383, which represents a decrease of $277 from Q2 2017. Factoring for development, we anticipate a final value of $3,413.”