When faced with changing dynamics or imminent disruption,business executives tend to respond in one of three ways:

1. Many will simply do more of what they've always done, puttingtheir tried-and-true “success formulas” into hyper-drive.
2. Others will wait for the “dust to settle” before takingaction.
3. A few bold explorers will seek out innovative newsolutions.

“Quick fixes”

Faced with falling profits caused by rising collision repaircosts, claims counts and accident severity, many auto insurers aretempted to choose Response #1. Despite the availability of moderntechnology platforms that can dramatically lower costs and improveadjuster efficiency, claims managers may be tempted to rely on the“usual suspects” — quick cost-cutting fixes that have worked in thepast. But this time around, these quick fixes may cost autoinsurers more money than they save. Worse: they may also damagecustomer service and retention efforts.

From 2008 to 2014, auto claims managers were accustomed torelative consistency in loss payouts. Auto insurers enjoyedrelatively flat accident and severity rates, as well as decreasingloss frequency, thanks in part to high gasoline prices.