A new report from CCC Information Services Inc. (CCC) examines anumber of trends affecting the auto collision industry, as well assome aspects of property and casualty insurance.

Technology continues to be a huge change driver for consumers,insurers, repairers and the auto industry in general. Whether it ischanging how these players communicate, their expectations, repaircosts or the vehicles themselves, its impact is wide ranging,according to the 2017 Crash Course report.

Consumers are a driving force on several fronts — how theyuse technology affects their expectations of insurers and othervendors they interact with on a daily basis. Where they choose tolive and work, and how they commute between those two locales ischanging as residents seek more urban areas. Growth in urban areasis surpassing suburban areas, but almost 50 percent of Americansstill live in the suburbs.

Related: Top 7 insurance industry concerns for2017

As the population in these areas increases, so do the number ofdrivers on the roads. Rural and urban interstates are seeing themost traffic growth. More drivers traveling at higher rates ofspeed also means more fatalities. According to the HighwayLoss Data Institute, there is a direct correlation betweenraising the posted speed limit and an upsurge in the number offatalities on these roads — each five miles per hour increases thenumber of fatalities by eight percent.

Finding an alternative mode of transportation may not alwaysdecrease traffic congestion, but a worker's age may determine whatsolutions are considered. Millennials are more inclined to considerride-hailing services, mass transit or even walking or biking towork. Services like Uber or Lyft are more likely to be used bythose aged 18-29 compared to consumers 65 or older.

The report identifies a number of other factors that arechanging the auto, insurance and repair industries. Here is a lookat 10 of the major drivers.

No. 1: Younger, morediverse and digitally connected consumers

Individuals from foreign countries accounted for 55 percent ofthe overall growth of the U.S. population from 1965 to 2015,according to the Pew Research Center. This resulted in thepopulation increasing from 193 million in 1965 to 324 million in2015. Pew estimates that 51 percent of the immigrants arrived fromLatin America, and one-third from Asia.

For insurers, this influx means more possible policyholders whomay have different views on insurance, require some education ontheir risks, and want to engage through different sales and servicechannels.

The fact that almost 60 percent of Hispanics are millennialsmeans they have unique expectations as consumers compared to othergroups.

With millennials now comprising the largestgeneration of the general population, insurers will find theyare more independent in a number of areas than baby boomers orGen Xers. A study by Novarica identifiedmillennials as researching items before purchasing them, frequentlybuying online, and preferring digital channels due to their speed,flexibility and ease of use. Social media and chat options also matter tomillennials, while the telephone is still the preferred method ofcommunication for older policyholders.

No. 2: Insurance,technology and claims filing

The use of digital channels also crosses over for millennialsinto the claims space. The Accenture Claims Customer Survey 2014 confirmedtheir preference for using these channels during the claimsprocess, with millennials stating that they would switch to anothercarrier if theirs did not provide this option.

Millennials also value advice and assistance during the purchaseprocess for insurance. Accenture found that 80 percent of theirsurvey respondents thought this was so important that they wouldconsider switching insurers within the following year if theirinsurer did not offer any type of guidance. They are also willingto pay for this type of service.

Using Internet of Things (IoT) devices toprovide a more personalized service experience was also valued bythose in the Accenture survey — 71 percent said they would beinterested in having their claims submitted automatically by eithertheir vehicle following an accident or by their connected home ifthere was some type of property damage.

No. 3: It's allconnected

The advent of connected devices like Amazon's Echo, Alexa andechodot; a range of appliances like video doorbells, thermostats,smoke and carbon monoxide detectors, smart lights, video cameras,cell phones and even children's toys provides new ways for consumersto connect and share information (either on purpose orinadvertently).

Insurers and other businesses are using information from IoTdevices to personalize pricing and identify risks unique to apolicyholder. Who owns the information and how it can be used isstill being determined, particularly when it comes to protectingdata privacy. Many of these household items are also vulnerable to hacking since they do not requireany type of security.

Related: 5 factors to minimize home-relatedrisks

No. 4: The rise of onlinepurchasing creates actual road congestion

With more consumers having online access through their computersand mobile phones, the option to purchase a wide array of itemsfrom non-traditional retail channels is growing. The result is anincrease in the amount of freight being moved by trucks and othertransportation services. The U.S. Departmentof Transportation (DOT) predicts a 40 percent increase in theamount of freight being moved in the next 30 years, while theactual value of the shipments will increase by 92 percent.

Trucks continue to be the preferred method to move freight andthe DOT projects a 44 percent increase in tonnage by 2045, withvalues increasing another 84 percent. Fleet traffic is also growingdue to the number of goods being purchased online.

The growth in urban areas and increase in the number of vehicles— both private and commercial — on the road, increasesthe risks for all drivers. The Property Casualty Insurers Association ofAmerica found the population increasing in the 10 worstperforming commercial auto loss ratio states.

No. 5: New carsales

Vehicle sales in the U.S. continued to rise, reaching a newrecord in 2016 with 17.539 million in total sales. CCC says 60.7percent of all vehicles sold in 2016 were light trucks andone-third were crossovers (an increase of 8.5 percent), whilemid-size cars showed a drop of 12 percent and compact car salesfell 5.2 percent.

Government-mandated safety and emissions equipment increased theaverage cost of a new car by as much as $5,000. The increase invehicle costs is also causing purchasers to spread out theirpayments over a longer period of time. The cost of a new vehiclewas also a primary driver in the number of leased vehicles, whichgrew to 32 percent for the first six months of 2016.

Related: 20 best cars for the money in 2017

No. 6: Part costs on therise too

The increase in the overall cost of a vehicle also impacted theprice of replacement parts when it was involved in an accident. CCCsays that “historically, replacement parts have accounted for about40 percent of the total repair cost,” with labor, paint and otherfactors contributing to the balance.

Changes in technology (more complex lighting or cameras inbumpers) and the materials used in body panels is affectingreplacement costs for newer cars. Vehicles that are seven years orolder are less affected by increasing prices.

As new vehicle sales begin to plateau, manufacturers areplanning to roll out approximately 48 new or redesigned modelsbetween 2016 and 2019, according to a report from Bank of Americaand Merrill Lynch.

No. 7: Auto claimimpacts

Today's vehicles last longer than ever before, and with more newcars and trucks on the road, fewer are being taken out of serviceeach year. Add to this the forecast that the number of vehiclesaged 16 years or older is expected to grow to 30 percent or 81million vehicles by 2021 according to IHS Markit.

Related: 11 companies lead the J.D. Power Auto ClaimsSatisfaction study

How does this affect auto insurance claims? CCC projects “theindustry would see an increase in newer age vehicle claims wheretotal loss frequency is lower, but repair costs are higher.” Inaddition, a larger number of older vehicles on the road could meanthat more vehicles are totaled when involved in a collision,further driving up the costs associated with total loss claims.

No. 8: Negative equity in vehiclesales

The number of individuals actually purchasing a new vehicle witha trade-in has dropped from 50 percent in 2012 to 45 percent in thefirst nine months of 2016, according to Edmunds.com, whiletrade-ins for used cars have grown four percent to 31 percent in2016.

These trade-ins created negative equity for the purchasers andcould be one of the reasons so many are taking on longer car loans.Experian Automotive found that “86.1 percent ofnew-vehicle buyers and 54.2 percent of used-vehicle buyers boughttheir vehicles with financing.” The average loan cost more than$30,000 for a new vehicle and $19,000 for a used one. Finance termsfor both new and used cars frequently ran between 73-84 months,meaning most buyers will not be looking for a new car for six ormore years.

A vehicle with negative equity involved in a total loss claimcan be more difficult to settle since consumers may not understandthe impact of depreciation on the value of their car. CCC says that“providing customers with information at policy renewal on thepresent value of their insured property could potentially help keepthem better informed, and avoid difficult surprises if there was atotal loss claim.”

No. 9: Vehicles as an IoTdevice

Vehicle technology is rapidly changing— new safety features, autonomous or semi-autonomous options,smart phone connections and other IoT devices are allowingmanufacturers and insurers to gather more information than everabout drivers and their habits. On a positive note, this canidentify opportunities for new products and services. A McKinseystudy “estimates that nearly $1.5 trillion in additional revenuecould be generated from on-demand mobility and data-driven servicesby 2030…”

There is the expectation that autonomous vehicles will be ableto communicate with each other at some point in the future,reducing the number and seriousness of accidents. Berg Insightestimates that the number vehicles equipped with OEM embeddedtelematics systems could increase from 12 percent in 2013, to 54.5million units in 2020.

All of this auto technology means that vehicles will be morevulnerable to cyber attacks and manufacturers are being forced torethink accessibility and security.

Related: Metrics can turn claims into acommodity

No. 10: Impacts forinsurers

What does all of this mean for insurers? Several things:

• Consumers want more choices and personalization across theirinsurance experience.
• They also expect greater service using their mobile devices— insurance technology matters to them.
• Increased access to data means insurers need to learn how towork with different types of unstructured data and keep all of thisinformation safe from hackers.
• More drivers on the road means increased claims, and newervehicles means that they will cost more.
• Technology is causing more distracted driving, causing more,not fewer, accidents. Talking or texting while driving results inmore cognitive distractions.
• There has been an increase in bodily and personal injury claimsas more miles are driven and more cars travel on interstatehighways.
• How consumers commute to work is changing. There are moreriding their bikes, walking and using ride-hiring options.Fatalities have increased for bicyclists and pedestrians.
• The cost of vehicle repairs will continue to increase asvehicles become more technologically complex, the cost of OEM partsescalates, and repair tools continue to change. According to CCC,the average cost of a repair in 2016 was $2,861, up 3.8 percentfrom 2015.
• In the next 10 years, crash avoidance technology could reduceauto claims by 7 percent, and by 12 percent in 2034.

The impact of digital technology means that insurers must adaptmore quickly than ever before. Their policyholders demand it andthe amount of information now available can be a key differentiatorin keeping insurers aware of new opportunities and risks in orderto survive in today's constantly changing environment.

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