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Interview with Ryan Mandell, Director of Claims Performance, Mitchell International Inc

 

Mark Hadaway, Co-founder of ARC360 and ILC team member has been chatting to Ryan Mandell, Director of Claims Performance, Auto Physical Damage Solutions, Mitchell International Inc – one of our Motor Conference speakers.

Mitchell International’s director of claims performance, Auto Physical Damage Solutions, Ryan Mandell is a man with his finger on the pulse of the industry, both in North America and across the globe.

Having worked his way up from the shop floor and seeing the industry from several different perspectives en route to where he is now, Ryan believes that the one thing that really counts in today’s often challenging world of automotive claims is a ‘proper and safe’ repair.

With exposure to insurance, OEM and repair markets, Ryan’s observations of the industry are relatively straightforward: ‘There is, without doubt, going to be more focus on proper and safe repairs as we continue to move into the technological automotive era. And we at Mitchell want to be at the very heart of that.’

OEM key area of focus

With already strong ties to OEMs, including OEM specific repair methodology on its estimating platform as well as OEM parts listings, Ryan strongly believes this is a key area for continued focus in the future, not just for Mitchell but the industry as a whole. OEMs are also looking to enter into the repair space by providing greater oversight and influence over the collision repair process, in order to enhance their customer experience and develop brand loyalty – something that is of great commercial value ($5bn per percentage point of overall automotive market share) to them.

‘We are focused on furthering our partnerships with OEMs by highlighting to users of our systems OEM approved repair networks and, also, ensuring OEM data is at the forefront of repair activity,’ explained Ryan. As part of this effort, Mitchell has introduced critical repair methods/parts descriptions within some of its estimating solutions aimed at helping to facilitate proper and safe repairs.

Innovative technology influencing change

The driving force behind this alignment with OEMs has been accelerated in recent years by the rapid increase of innovative technology, and advanced construction materials and methodologies. This has resulted, certainly across North America, in an unequivocal increase in repair costs. In the US market, this has been further influenced by the ‘massive shift away’ from passenger cars to SUVs and light trucks, resulting in 12-15% uplift in average repair costs over the past two years.

Without doubt we are seeing repair costs increase,’ said Ryan, ‘but with that, as advanced driver assistance systems (ADAS) becomes increasingly ubiquitous, we anticipate volumes will start to decrease. Interestingly, accident frequency has been relatively flat in the past few years, off-setting the impact of ADAS, as a result of the rise in distracted driving.’

He continued, ‘However, we do envisage claims decreasing in the coming years but as this happens there will likely be a rise in severity, and therefore individual job costs, as increasingly complex systems and technologies are impacted. Take a BMW, for example, a repair on a 2019 model is a completely different repair to what would have been specified on a 2010 model, and likely double the cost.’

Rising parts prices contributing to costs

Rising parts prices is one contributing factor for the increase in repair costs according to Ryan. He referenced how the industry parts price index had seen relatively consistent inflation between 2003 – 2013, stagnating in 2014, before increasing significantly year-on-year since. He also aligned this with the fact that in 2018, some 43.2% of estimates included vehicles constructed with some kind of ‘special materials’ – lightweight substrates such as aluminium and carbon fibre that reduce the overall weight of the vehicle and provide greater energy absorption, but also reduce the repairability of the components themselves in the event of an accident. This compared to 6.45% in 2012.

‘Modern vehicle repair is as much about, if not more, what we cannot physically see as what we can,’ said Ryan. The requirement for diagnostic scanning is also now apparent in around one third of estimates today and this, according to Ryan, is a critical area that provides insight into the systems impacted in a collision and the steps needed to fully execute a proper and safe repair.

Fully automated processes on the way

This is one of the reasons the much-heralded advent of fully automated processes, including estimate generation and approval, is truly yet to have landed. However, it is undoubtedly on the way and Mitchell, through a wide range of partnerships with insurance carriers, has been feeding its artificial intelligence systems with hundreds of millions of historical images and data in readiness.

‘We could implement a fully automated claims journey tomorrow, but the fidelity level would not be where we need it to be,’ explained Ryan, ‘in reality we are a couple of years away from achieving a completely automated process, but there is no doubt it is coming.’

It is the idea of extracting humans out of the loop that is often met with resistance within the market but according to Ryan this should not be feared – and, in fact, in his opinion, embraced as it will add actually add human value back into the process. ‘Fully automated estimating processes will only really be suitable for low severity/low complexity claims. There will still be a sub-set of collisions requiring human expertise allowing assessors and engineers to get back to what they really want to do and use their expertise,’ said Ryan.

‘We must remember, vehicle repair is so highly complex, with many decisions made during every process, human intervention will undoubtedly be required on certain highly involved cases providing the best outcome for all concerned.’

Technician roles to become highly sought after

Ryan firmly believes that despite the current skills crisis throughout the industry, the role of vehicle technician will once again become a highly sought-after vocation, but it will take a concerted effort from the industry to achieve it. ‘With all that is happening with advancements within automotive, I’m optimistic that in the next five years the role of a technician will be popular. The complexity of systems will attract a different type of technician but that will also have a positive impact on attracting more craft-oriented skillsets too. I just think the whole dynamic will change and eventually remuneration will start to increase.’

Ryan too has a positive outlook for repairers and feels a great opportunity exists to truly understand repair capabilities. ‘There is lots of misinformation within the market about what can and cannot be done,’ explained Ryan. ‘I actually feel there is a great opportunity to be able to repair more with a greater focus on retaining the original integrity of the vehicle – a win for all in my opinion. Repair facilities that understand and embrace this will be the ones who benefit.’

Despite this, more importantly than anything, Ryan remains resolute of the priority for the industry in general. He said, ‘We all have a responsibility to ensure proper and safe repairs. We need to refocus our attention to making sure we restore customers’ lives.’