Automotive claims inflation is expected to continue through 2022 at a similar rate to 2021.
This is according to DAC Beachcroft, a global provider of bespoke solutions to industries including insurance, healthcare and real estate.
It found that the drivers of inflation during 2021, such as a shortage of skills, parts disruption and higher energy costs, will continue to impact the market this year.
It pointed to data from Willis Towers Watson that put claims inflation at 6.1% for UK motor insurers during first half of 2021. The data also found that accidental damage had increased at the fastest rate ever over the last 18 months, surging by 8.2% during the first six months of 2021 and 8.4% in 2020.
However, DAC Beachcroft suggested that there were measures insurers could take to offset inflation.
For example, it urged insurers to build stronger relationships with its supply chain to ensure their partners had both the skills to repair vehicles safely and access to parts to repair them quickly.
It recommended using green, or recycled, parts to counter growing delays in the supply chain, pointing out their economic and environmental benefits.
It also warned insurers to be alert to repairers artificially inflating costs, with its own research finding that the practice of accepting roadworthy vehicles onsite while awaiting repair had risen 14% in the last 12 months.
