Mitchell's latest report offers some interesting insights about evolving trends and tools in both the casualty and auto physical damage industries, including current factors impacting auto claims severity.
One notable feature of the third-quarter 2013 Industry Trends Report (ITR) is the addition of workers' compensation market analyses. Comprising this new section is expert commentary on emerging regulations and how p&c insurers can maneuver state-specific compliance issues. Christopher Tidball, a longtime PropertyCasualty360.com and Claims Magazine contributor, authored numerous segments, including an overview of bodily injury demands. 
The Casualty Side
Also included in the casualty report is a supplemental piece by Shannon Frank, director of consulting services for Mitchell's workers' compensation solutions division, in which Frank outlines 10 best practices for managing medical bill review operations, from efficient data capture to automation and straight-through claims processing. Frank underscores that "efficiency and cost containment are paramount," yet "accuracy in adjudication and compliance with state regulations must serve as a foundation for all bill review decisions."
Another prominent feature of the report is the exploration of how core tenets of internal processes and technology solutions ensure success. In the feature, "Innovation Applications for the P&C Industry," Shahin Hatamian, vice president of product management & strategy for Mitchell's workers' compensation solutions division, and Vidya Dinamani, vice president of product management & marketing for Mitchell's auto casualty solutions division, highlight the value of innovation through Agile development processes.
"In the P&C industry, effective innovation is built around customer feedback and collaboration, which in turn leads to new ideas that quickly turn into refinements that are developed and tested again with customers," explain Hatamian and Dinamani. "The net result is better value to customers by incorporating ideas internally and externally to the development organization."
Auto Physical Damage Trends
In another feature article, Greg Horn, vice president of industry relations at Mitchell, endeavored to determine the greatest contributing factor to auto claims severity. Horn analyzed the impact parts costs have on average severity over time, noting the emphasis is too often placed on the four major cost areas: labor, parts, paint and material, which make up the average paid repairable severity.
Charting the dollar spend for parts against labor types and paint and materials costs beginning in 2005, Horn found "there was an overall decrease in average repairable severity leading into and during the recession, and a uniform increase in average paid severity afterwards," and by investigating the other components that make up the cost of an estimate, he concludes that despite the reduced number of parts per estimate, the fact that "cars have become more complex and have more painted panels, such as color-coded bumpers" is driving the increase in average repair severity for specific vehicles.
A supplemental article written by Paul Rosenstein, Vice President of Claims Solutions at Mitchell, describes how Mitchell will be changing claims estimating with 3D scanning technology. Rosenstein details the company's current efforts to build a database of clean 3D scans of vehicles and how that information could be used in the future to innovate with physical damage claims processing.
"We can leverage the data collected to support other workflow scenarios like consumer self-service, fraud detection and deformation-based estimating," he says.
Mitchell also offers a webinar, Industry Trends Live, on the Auto Physical Damage edition of the report. Horn will provide a deeper look into the trends, information and studies highlighted in this quarter's ITR on August 21, 2013. To sign up for the industry trends webinar, visit http://www.mitchell.com/pubs/industry-trends-live/schedule.asp
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