SOURCE: Mitchell International

Mitchell International

November 02, 2009 06:00 ET

Mitchell Releases Special NACE Edition of Industry Trends Report

Study Reveals Unexpected Finding of "Substitution" Effect Resulting in Decreasing Estimate Severity Despite Rising OEM Part Prices

SAN DIEGO, CA--(Marketwire - November 2, 2009) - Mitchell International, Inc., a leading provider of information, workflow and performance management solutions to the Property & Casualty claims and Collision Repair industries, today released the fourth quarter 2009 Special NACE Edition of its Industry Trends Report (ITR) -- the company's quarterly publication that highlights industry-related trends, news items and statistics.

This edition's Quarterly Feature, "The Mitchell Collision Parts Price Index Proves the Unexpected: When OEM Part Prices Increased, Estimate Severity Decreased," by Greg Horn, Mitchell's Vice President of Industry Relations, reveals surprising findings important to all participants in the collision repair marketplace. Horn's analysis of the Mitchell Collision Parts Price Index (MCPPI), a metric similar to the Consumer Price Index (CPI) but created specifically for the collision repair industry, discovered that due to the substitution effect estimate severity has deceased despite rising OEM part prices. The MCPPI is based on the industry's most comprehensive data for the top 20 most-replaced collision parts, which can be used to accurately assess how inflationary trends by part type impact the collision repair community.

"Mitchell's in-depth and multi-year data sets give the collision repair industry an unparalleled ability to understand significant changes in the way repairs are made and the resulting impact on estimate average severity," said Horn. "Comparing our supporting data from the MCPPI with trends in severity and the national rate of inflation shows that a clear substitution effect is at work, causing average gross repairable estimate severity to decline, despite rising OEM parts prices."

Added Horn, "As repairers opt to substitute more economically viable used or aftermarket parts in place of costly OEM parts in ever-larger numbers, the net effect has been a decrease in parts dollars and increase in labor dollars on repairable estimates in recent years. Mitchell's data and analysis is committed to helping the collision repair industry understand these changes, and the reasons behind them, in order to help our customers compete in a constantly changing marketplace."

The 2009 NACE edition of the ITR also includes a feature on best practices for customer satisfaction research in the collision repair industry from AutocheX -- Mitchell's customer experience management group. Jason Bertellotti, Mitchell's Vice President of Repair Solutions, provides an insightful piece on cultural factors that impact Hispanic satisfaction survey outcomes in this industry. With the immense growth in population and buying power of the U.S. Hispanic community, it is increasingly important to understand the collision repair experience from the Latino perspective and the issues that may affect their level of satisfaction.

Other valuable points of interest in the current issue of Mitchell's ITR include:

--  On average, the Actual Cash Value (ACV) of vehicles appraised for
    Collision losses during Q-3 2009 was $12,188 -- $829 less than in
    Q-3 2008 -- reflecting the continuing lower value of today's vehicle
    mix.
--  In Q-3 2009, the average gross appraisal value for Comprehensive
    coverage estimates processed through our servers was $2,468 -- compared
    to $2,356 in Q-3 2008. Applying the prescribed development factor of
    2.1% for this data set produces an adjusted value of $2,520, a $164
    increase from this same period last year.

Complete content is available in the latest Industry Trends Report, which may be downloaded in PDF format by visiting www.mitchell.com. First published in April 2001, Mitchell's Trends Report has grown in both content and circulation, now reaching more than 23,000 collision and casualty industry professionals.

About Mitchell International, Inc.

Mitchell International (www.mitchell.com) is a leading provider of information and workflow solutions to the Property & Casualty Insurance Claims and Automotive Collision Repair industries. The company's comprehensive solution portfolio streamlines the entire auto physical damage, bodily injury and workers' compensation claims processes. Mitchell enables millions of electronic transactions between more than 30,000 business partners each month to enhance partner productivity, profitability, and customer satisfaction.

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