Motor insurers face ‘critical shortfall’ in crash repair capacity
18/02/2015 in News Home
"The latest UK Car Body Repair Market report, by independent research company Trend Tracker, warns that insurance company profits will be hit by a repair capacity deficit.
The number of bodyshops has declined by 32% over the last decade and Trend Tracker predicts a further 9% decline, to just 3,020 by 2020.
This, combined with an expected 2% increase in the number of repairs, will create an 11% shortfall in repair capacity by 2020.
With insurance companies financing around 70% of all accident repairs, bodyshop owners have long bemoaned the lack of profit in insurance-funded repairs. This, coupled with a fall in the number of accident repairs since the 2006 peak, has led to many bodyshop closures, says Trend Tracker."
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"Trend Tracker says if you ignore investment returns, motor insurers as a whole are expected to have been loss-making in 2014, with a combined ratio of 109%. This is partly due to excessive competition and persistently high personal injury claims, although accident damage claims account for two-thirds of all motor insurance claims.
For motor insurance companies, including the listed firms Admiral Group, Direct Line Insurance Group and Esure Group, shrinking repair capacity combined with an increase in repair demand will result in rising accident repair costs and constrained profitability, claims Trend Tracker.
However, it continues, for companies in the accident claims and accident repair market, including the listed firms Innovation Group, NAHL Group, Quindell, Redde (formerly Helphire) and Nationwide Accident Repair Services, growth in the number of motor accident and repair claims will provide a welcome boost to their businesses."
Full article from liunk below:
http://www.fleetnews.co.uk/news/2015/2/18/motor-insurers-face-critical-shortfall-in-crash-repair-capacity/54861/