Will Complex Autos Transform Insurance Repairs?

I recently presented at the IAEA National Conference. IAEA are the professional body representing inspectors that look at damaged autos and get them back on the road. The broad content of this conference, dealing with research, repairs and innovation in the motor industry, reflected the complexity of a part of the insurance industry that we often take for granted, yet are quick to complain about when the repair process doesn’t go smoothly.

As vehicles become more complex, with 2000 functional components containing 100 million lines of processing code, the modern car is comparable to a space shuttle. The early shuttles incidentally had only 400,000 lines of software code. New vehicles increasingly comprise structural aluminium components, carbon fibre and multiple detection devices. Think of it in these terms – that auto bodyshops repair the equivalent of space shuttles every day.

Vehicle designers increasingly have to think about the ability of the supply chain to carry out complex repairs. Technology may be resulting in fewer accidents, but the cost and difficulty of repair is increasing. Manufacturers cannot create vehicles that are unrepairable, and have to take the lowest common denominator of repairer into account, especially in less mature marketplaces or relatively remote locations. The auto industry won't be held back by the quality of insurer repair supply chains.

Brand reputation is critical for both vehicle makers and insurers. Changes in the traditional approach to insured repairs are bound to emerge, with manufacturers having greater influence over the repair process. Auto repairers and supply chains will also have to evolve to deal not only with the complexity of prestige cars, but all vehicles.

Developments in the auto insurance are being driven by changes in customer behaviour, and the advent of the ‘digital customer’. Perhaps there is another key issue, and that is the rapid advancement in auto technology.