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    • Aug 1
    • 6 min read

Motor Insurance Cycle Times: A Constantly Evolving Measure

The duration from the reporting of a claim to the completion of vehicle repairs - motor insurance repair cycle times - is a critical factor in both the customer experience and insurer operational efficiency. In the UK, these cycle times have been extended significantly by factors such as the COVID-19 pandemic, parts shortages, courtesy car availability, ongoing geopolitical conflicts, bodyshop closures etc.


However, Procurato's recent research indicates that cycle times have also evolved in the last 12 months due to several factors including improved availability of parts and courtesy cars and technology improvements.


This paper reviews the current state and predictors of repair cycle time.


Motor Insurance cycle times -

[Source: Canva]

The Current Landscape

The UK market for motor insurance is highly competitive, and insurers are locked in a battle to win the trust of consumers. Customers have become accustomed to faster, more transparent services similar to those in retail and banking, putting pressure on insurers and bodyshops to reduce repair cycle times.

Cycle time

In 2022 cycle times averaged 60+ days. Over the last two years, lead times have declined to 40-45 days in 2023. Procurato’s research is now showing a reduction to 30 days in Q1 2024.

Key to Key times

Recent industry reports and Procurato’s own research have shown that the average key to key time in the UK is now between 10 and 15 days.

What are the Drivers for a fall in overall cycle times?

Parts availability

The ramp up of new car sales post Covid, the war in Ukraine and the availability of materials to manufacture spare parts all had an impact on the availability of parts to repair vehicles. These events are no longer driving the availability of new parts:


Post Covid car sales – although car sales have generally been increasing in 2023 and 2024 in the UK and the EU[1], manufactures are now able to meet and in some cases over produce against the current demand due to increased capacity and increased competition from China. This has even led to in July 2024 Volkswagen announcing that they may close a plant for the first time in Brussels as low EV demand hits Audi[2].  Procurato’s own research with Tier 1 car component manufacturing plants supports this, with most reporting a decrease in demand. This shift will improve parts availability as components are no longer prioritized for new vehicle production.


The war in Ukraine – when the conflict erupted in 2022, there was a shortage of components manufactured there, sometimes being the sole source of supply. Parts like wiring looms were particularly problematic. However, car manufacturers have since strengthened their supply chains, and these issues have nearly disappeared, leading to quicker availability of spare parts.


Availability of materials to manufacture spare parts – there are now minimal shortages of raw materials needed for parts production due to increased capacity and decreased global demand. Key component prices have dropped over the past two years: aluminium by 36%, plastics by 3%, and semiconductors have remained stable. This cost reduction should also enhance parts availability.


However, it is not all good news on parts. New manufactures and models are a challenge in sourcing all the necessary parts. A recent example is BYD and the challenges faced currently securing spare parts for these vehicles.

Courtesy cars availability

 In 2022 and parts of 2023, bodyshops struggled to secure small cars due to their high cost and limited availability. During this period, only specific brands like MG were readily accessible. The scarcity of available parts also meant customers spent more time in courtesy vehicles, further reducing their availability. When a customer needed a car during repairs, this had to be factored into the repair start date. The situation has significantly improved since the times when new cars were scarce and costly, contributing to a decrease in repair cycle times.

Technology Advancement

Another change identified by Procurato's research that has improved cycle times has been the use of digital claims processing. Insurers now leverage software with embedded machine learning and artificial intelligence (AI) - to make FNOL decisions faster and more efficient, improving initial claim reporting and assessment processes. The biggest area we have seen improvements is the correct identification of total loss at FNOL with fewer total loss vehicles going initially to bodyshops.

Bodyshop Volumes

Despite the number of repair body shops in the UK market declining year on year since 2008, there was c. 150 new bodyshops opening in Q1 2024 which drove new capacity and has helped to reduce cycle times significantly. Additionally with the general fall in claims across the sector, Procurato’s research suggests that there is now an almost equal match of demand vs supply of quality repair capacity.

Challenges

Our research highlights that while there have been advancements in reducing repair times, the automotive repair industry still encounters obstacles, such as the complexities introduced by modern technologies in repairs, change in the type of claims and availability of technicians to repair vehicles.

Complex Repairs

Modern vehicles now come with electronics and safety systems leading to more intricate and time intensive repair processes. The need for skills and equipment can prolong repair durations especially when these resources are limited. The continued adoption of ADAS is just one example of this.

Change in the type of claims

In 2024 insurers are seeing a fall in the number of claims made as a result of increased excess amounts as people have opted for higher excess amounts due to the cost-of-living crisis and rising insuring premiums.  Some insurers report that most of their repair claims are now £700+. Higher value claims tend to be more complex and take longer to repair and will be a factor why cycle times might not reduce further.

Availability of technicians

As per our research, 90% of automotive leaders says workshop and technical roles are the hardest vacancies to fill. It has been a long-standing problem as technicians continue to retire and there is a lack of experienced and qualified technicians, meaning that repairers are having to pay more to keep their best people, leading to wage inflation.

 

However, according to Office for National Statistics[3], the number of UK Job Vacancies for Labour in Insurance sector has been gradually falling since April 2022, reaching 34 thousand open vacancies in April 2024.

 

Our recent discussions with insurers and bodyshops indicate this is still a big issue and might impact cycle times if volumes of claims increases in the future.

Opportunities

Mobile Repair Services

The increased use of mobile repair units has the ability to shorten cycle times. These units perform minor to medium repairs and adjustments at the customer’s location, eliminating the need for the vehicle to be taken to a repair shop. Although the number of small repairs have fallen, Procurato’s analysis of current repair data suggests that insurers still have more opportunities to send more repairs to mobile repair services which will significantly reduce the overall repair time and key to key times.

Future Trends

According to our projections, the future of motor insurance repair cycle times in the UK is expected to be influenced by several key trends. These include the growing changes in the UK car parc towards electric vehicles, use of AI and Machine Learning and the expansion of connected car ecosystems and

Electric Vehicles (EV’s):

The adoption of electric vehicles (EVs) will continue to increase. Currently, EVs make up 2.6% of the UK Car Parc and represented 56% of all new vehicle registrations in 2023. As the use of EVs grows, repair times will also increase due to the safety procedures and advanced technology integrated into EVs. At present, EV body parts like bumpers are not substantially different from those of internal combustion engine (ICE) vehicles.


There are new EV designs entering the UK marker (predominantly from Chinese manufactures) which are based on integration of the battery system into the vehicle structure which complicates repairs due to potential battery damage from structural impacts. Chinese-branded EVs alone are set to account for 11% of the EU’s electric car[4] market in 2024.

Further Integration of AI and Machine Learning:

The advancement of AI and Machine Learning will remain key in improving repair procedures. Through analytics potential delays can be anticipated, enabling proactive actions to be taken. Expansion and accuracy of AI-driven damage assessment will improve the accuracy and speed further which will also ensure the right repair measure routing is adopted by claims handlers (total loss, mobile repair or bodyshop repair).

Expansion of Connected Car Ecosystems:

As connected car technology becomes more widespread, the data provided by these vehicles will further streamline the claims and repair process. Enhanced diagnostics and automated reporting will enable even quicker responses and repairs.

Conclusion

Procurato's research reveals that motor insurance repair cycle times in the UK have improved significantly due to better parts and courtesy car availability and increased repair capacity. However, several challenges could affect the continued reduction in cycle times. These include more complex repairs, a shift towards electric vehicle (EV) repairs, and an ongoing shortage of skilled technicians. Insurers must ensure their supply chains adapt quickly to modern technologies and secure long-term quality repair capacity.

 


 

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