2023 was certainly an impactful year for insurers. From the introduction of the FCA’s new Consumer Duty regulation, to ongoing challenges in the repair supply chain, last year brought new considerations for every step of the claims process.

Activate Group works with some of the UK’s best-known insurers, underwriters, and MGAs to ensure swift, coherent accident management. We assist them throughout the claims process to ensure swift incident reporting, consistent response, and fast, high-quality vehicle repair.

Here we discuss some of the key topics discussed throughout the industry in 2023, the challenges insurers faced, and the steps we’ve been taking to strengthen our approach…

What topics were insurers discussing in 2023?

– AI and its use cases throughout the claims process

Artificial intelligence became a huge talking point across all industries in 2023. For insurers, their focus centred on how this technology could be tailored to streamline some of the key elements of their claims process.

Many suppliers began showcasing new developments in both visual and text-based AI, with applications right across the claims supply chain – from customer support chatbots to AI damage analysis, and total-loss decision-making.

Here at Activate Group, we’ve partnered with market-leading AI providers to develop proof-of-concept solutions, with applications throughout the claims process. While still in their relative infancy, insurers can anticipate new AI innovations emerging throughout 2024, as suppliers continue to deploy new applications for the technology.

– The FCA’s Consumer Duty regulation, its challenges & opportunities

Last year saw the FCA introduce its new ‘Consumer Duty’ regulation, which seeks to ensure customers always receive positive outcomes, fair value, and high-quality products & services.

This quickly became an influential topic in the claims space, with insurers discussing new ideas and innovations to enable consistent, positive, and well-informed journeys for their customers.

As a result, they explored and deployed new solutions throughout the claims journey to facilitate ease and efficiency for their policyholders. These included incident reporting innovations like Electronic Notification of Loss, and comms automations like AI chatbots/assistants, which provide new pathways for customers to submit and access vital details about their claim.

It also encouraged insurers to explore alternative repair methodologies, like mobile/smart repair, which allow them to actively reduce key-to-key turnaround for some customers. In many cases, this has helped them to facilitate quicker claims outcomes, freeing up time and capacity to resolve more complex repairs, and even reducing costs.

Learn more about Consumer Duty, and what it means for insurers 

– Achieving sustainable repair practices, and EV battery recycling (ESG)

Sustainability, or Environmental & Social Governance, has long been an influential talking point for business. However, 2023 saw insurers ramp up their ESG considerations – particularly relating to the landfill and carbon impact of their repair practices.

In particular, insurers sought more sustainable solutions for sourcing replacement vehicle parts, and disposing of total loss vehicles, or damaged components, in a more environmentally-conscious manner.

This included making new considerations around the storage and use of green/recycled parts, and enhancing partnerships across the vehicle disposal/recycling industry.

A core part of this conversation was the approach to EV, particularly the disposal of their complex batteries and powertrains. With so few lithium battery disposal sites in the UK, it’s clear that suppliers must fuel new innovations, and forge new partnerships, to ensure their EV strategy aligns with ESG commitments.

– Adapting repair practices to emerging vehicle technologies

The complexity of vehicle technology is advancing at an unprecedented rate, with both onboard safety features, and increased uptake of electric vehicles posing huge considerations for repairers.

As a result, many insurers spent 2023 discussing how they could adapt their own repair practices to account for this increased complexity, and mitigate some of the added costs.

This meant working closely with their suppliers and repair partners to understand the enhanced requirements of some of these vehicles, and ensure their networks had the tools and expertise to account for them.

Read more about EV repair considerations

What were 2023’s biggest challenges for insurers?

– The ongoing shortage of accessible repair capacity

2023 saw the continued impact of the repair industry’s post-pandemic capacity challenges. With demand for repair services increasing in the first quarter of 2023, and capacity still short, many repairers were forced to become more selective of the work they accepted.

Additionally, the repair industry reported significant staff resourcing challenges. In a report from the ABP Club, 41% of bodyshop professionals reported this to be the biggest threat to their business in 2023.

This led to an increase in both lead and cycle times throughout the year, as many repairers struggled to keep up with significant demand for their services. 

By September, repair lead times had risen to an astonishing 42 days on average, an increase of 4 days from the same point in 2022.

While key-to-key times did reduce throughout the year, falling from an average of 21 days to 17 days, the above increase meant total cycle times remained high, falling by just one day from 2022, to 59 days on average.

(Source: TrendTracker, Oct 2023 Repair Market Snapshot)

– Claims inflation & cost control challenges

Claims inflation remained a prominent issue in 2023, with insurers reporting increased costs at all ends of their supply chains – from repair outlay to courtesy vehicle premiums.

This was reflected in both higher operating costs for insurers, and inflated insurance premiums for their customers. In fact, the Association of British Insurers reported that premiums rose by an astonishing 29% between Q3 2022 and Q3 2023.

This was heavily influenced by an increase in energy, parts, and labour costs for repairers, as well as lengthened key-to-key times leading to customers spending longer in courtesy hire vehicles.

The average cost of vehicle repairs soared by £377 in H1 alone – an increase of 15.7% from the same period in 2022, according to data from TrendTracker.

In order to mitigate, many insurers elevated cost and time-saving measures throughout the repair journey, including utilising mobile repair where appropriate, and harnessing green parts rather than new OE. 

However, despite such concessions, most still saw a significant increase in costs at every end of the claims process.

– Vehicle parts supply chain shortfalls

2023 saw continued difficulty for international parts supply chains, as inflationary pressures, increased demand, and logistics challenges made it more difficult for repairers to access replacement components.

As a result, almost 40% of repairers reported that between 10% and 20% of their jobs were affected by delays in parts sourcing last year, according to the ABP’s State of the Industry Report.

As expected, this left many insurers facing significant delays in getting their vehicles repaired post-incident, with total cycle times maintaining the high levels seen in late 2022.

This further exacerbated cost control challenges, and brought new considerations for their parts strategies – including increased uptake of ‘green’ and aftermarket parts.

What we’ve achieved in 2023…

Activate Group constantly monitors the emerging challenges and opportunities throughout the market. We use these insights to  – developing our technology provision, and empowering customers to overcome their operational obstacles.

Here are just a few of the achievements and innovations we brought to market in 2023…

eNOL web-app launch: Activate Initiate 

Last year, we launched our white-label eNOL solution – Activate Initiate. The web-app allows policyholders to report incidents quickly and accurately, from the scene, using a guided interface in their mobile browser.

This helps insurers to increase the value of the data they receive at FNOL stage, and use this to facilitate swift response, accurate damage assessment, and right-first-time repair deployment.

Initiate is just one of our self-developed claims technologies, built with insurers’ challenges and priorities in mind. It can be easily tailored to your brand and its unique reporting requirements, and integrated seamlessly with your existing systems and processes.

Learn more about Activate Initiate here

Achieving market-leading NPS scores above 70%

2023 saw our brand Motor Repair Network achieve market-leading NPS scores of above 70% – testament to our resilient & responsive service offering, and commitment to strong customer outcomes.

In spite of last year’s challenges, our focus remained on securing success for our customers, and a positive experience for their policyholders. We worked with them closely to identify obstacles, and adapt our service offering to mitigate and overcome them.

This included close consideration of the new Consumer Duty regulation, which has played an instrumental role in enhancing our service delivery – helping our customers achieve positive and consistent consumer outcomes.

Learn more about our Consumer Duty commitments

Two new EV-compatible Activate Accident Repair bodyshops

Last year, our sister company Activate Accident Repair opened two brand-new, EV-compatible bodyshops in Mildenhall and Sunderland.

Like all bodyshops in our owned network, they’re fitted with the latest repair equipment and technologies, allowing them to cater for vehicles of all varieties and fuel types, and with all kinds of onboard technologies. 

This further built on our commitment to providing accessible repair centres in the locations our customers need them most, bringing our total network to nine purpose-built bodyshops. 

Learn more about our Activate Accident Repair bodyshops

In Summary

2023 was an impactful year for both insurers and their suppliers. As well as seeing the continuation of many challenges from the previous year, it brought new obstacles and considerations at all ends of the claims supply chain.

Here are some of the key challenges insurers faced in 2023:

• The new FCA Consumer Duty regulation brought new considerations for how insurers and their suppliers ensure positive customer journeys & outcomes
• The ongoing shortage of accessible repair capacity, influenced by post-pandemic bodyshop closures, technician recruitment challenges, and increased demand
• Claims inflation, influenced by increased repair costs & turnaround, a shortage of courtesy vehicles, and a rise in general operating costs for insurers & their suppliers
• Shortfalls within international parts supply chains meaning it took longer, and often cost more, to source the right replacement components to repair vehicles

As well as these immediate challenges, 2023 also saw insurers discussing their approach to EV repair, their utilisation of AI & machine learning in the claims process, and how they could achieve more sustainable repair practices.

Here at Activate Group, we saw the launch of our white-label eNOL solution, Activate Initiate, two new Activate Accident Repair centres, and reached a net promoter score of above 70%. This is testament to our constant analysis of the industry landscape, and commitment to innovating and scaling our solutions to mitigate emerging challenges.

Stay tuned for more insights from Activate Group throughout 2024, or get in touch below to learn more about our award-winning claims services: