Insurance, Repairables, and The Auto Industry’s Record Staffing Shortage

As with many industries, the auto industry continues to face the carry-on effects of the COVID-19 pandemic. Yet for the auto industry, in particular, pandemic-fueled challenges have been compounded by changes already taking place in the market—including the rapid evolution of automotive technology over the past decade.

As Advanced Driver Assistance Systems (ADAS) become standard, the repair of these complicated systems becomes more and more difficult. This is leading to challenges for auto shops being able to recruit and retain qualified technicians. This staffing shortage has significant impacts on repairs, purchases, rentals, and by extension, the insurance industry.

The Effect of Advanced Auto Technology on Repairs

Advanced Driver Assistance Systems (ADAS) are designed to prevent accidents and the serious impacts accidents can cause, including injury and death. There are a variety of applications of ADAS systems, including:

• lane assistance,
• adaptive cruise control,
• automatic parking,
• navigation,
• and more.

Considering the improved safety of vehicles equipped with ADAS, many countries are beginning to mandate certain types of ADAS systems. At the same time, the demand for semi-autonomous vehicles is also on the rise. According to Markets and Markets, “the ADAS Market size is projected to grow from USD 27.2 billion in 2021 to USD 74.9 billion by 2030.”

Challenges for Repair Shops

So what do ADAS have to do with repairs? When a vehicle with an ADAS system is sent to the repair shop, the ADAS system must be recalibrated. For many repair shops this can pose major challenges:

• ADAS calibrations require a specific environment, typically at least 30 x 50 ft.
• ADAS calibrations require specific equipment
• Techs need to be specially trained to perform ADAS calibrations
• Every manufacturer has a different process that must be followed to recalibrate their specific ADAS system

As a result, only 1 in 4 repair shops are equipped to perform ADAS calibrations. And while many may think, “I can just get the repair done at my dealership,” the percentage of dealers operating on-site body shops is only about 37%.

It’s for these reasons that 90% of ADAS work coming into mechanical shops is being outsourced, leading to timeline delays and increased repair costs.

Technician Shortages

While the auto technician shortage is not new, the pandemic has been an accelerator. In fact, between 2020 and 2021, demand for technicians nearly doubled, with demand outpacing supply by nearly five to one.

While low wages have been a top contributor to the technician shortage, there is more at play. With more advanced technology, such as ADAS systems, the demand for current technicians (and repair shops overall) is higher. The maintenance and repair of computerized vehicles requires:

• a high-level technical expertise,
• advanced problem-solving skills, and an
• ability to analyze data.

Given the low wages and historical perception of car repair as a “lower-status job,” students who possess these skills tend to opt into other, higher-paying career paths, such as engineering or programming. In addition to these factors, the auto technician industry is currently comprised of older workers who will retire in the coming years.

Slowed Repair Times

The shortage of repair technicians is yet another cause for auto repairs taking longer and costing more money. In fact, one study shows that just getting an appointment for a repair has been a challenge with 95% of shop owners saying they had backlogs of at least two weeks.

To compound this, another contributing factor is a labor shortage in the insurance industry. According to Forbes, with in-person appraisals being delayed, repair bookings are also taking longer than typical.

The exception, one report says, is:

“Appraisals that utilize photo estimating technology, which continues to provide customers with their initial appraisal and the information they need to make decisions much faster, such as whether they want to have their car repaired and/or make an insurance claim…”

So while insurance companies cannot control the staffing shortage, there are steps they can take to avoid contributing to the delay in completing the repair process.

Curbing the Issue With Comsearch

The delay and expense of repairs have direct and unavoidable impacts on the insurance industry. As policyholders are desperate to get back on the road after a collision, adjusters are having to overextend to meet demand. 

At Comsearch, we design every product and service with claims departments in mind. With tools like PhotoWrite, your adjuster can move repair and total loss claims down the funnel quicker, and with less hassle. 

Staffing shortages aren’t unique to the auto industry. As claims departments face similar challenges, outsourcing can help relieve the stress and financial burden of hiring and retaining talent.

If you’d like to know more about how we can support your changing needs, please reach out.