Market Dynamics

Each year in its Crash Course publication, CCC discusses at length the market dynamics driving change in vehicle accident frequency and cost.  Numerous broad-based demographic drivers have been reviewed, such as employment levels, changes in where people live, how they commute to work, aging population, etc.  These market shifts have been in place for numerous years, and while some may have seen larger swings due to the latest recession, they are driving slow but steady change within the marketplace.¹

As a greater share of the population falls into the youngest and oldest age groups, driving habits may result in further divergence in patterns of claim frequency and severity.  As the population shifts further to urban areas, increased congestion could lead to higher frequency, although increases in the use of public transportation would do the direct opposite.²  Yet there are no indications that there will be any major reversal or ramp up of these demographic shifts in the future; as such, the automotive insurance and collision repair industries should prepare and position themselves to work in a market that is slowly but surely getting smaller.

But perhaps least certain is how quickly advancing vehicle technology will drive change within the automotive insurance and collision repair industries.  New vehicle materials, crash avoidance technologies, alternative powertrains, autonomous vehicles, and car-sharing services all have seen rapid growth in just the last several years.  How will these change these industries, and how quickly remains unknown.