2008 – a Bumper year??
So far the year 2008 holds many surprises for us:
- Mandela still does his charismatic shuffle at 90
- Fidel Castro steps down while Bob keeps going
- Rising inflation and interest rates shock us back into reality
- Angelina Jolie and “husband” Brad Pitt increase their family size beyond the average, while the increase of the average vehicle repair cost slides below CPIx and PPI increases – isn’t this great news?
The majority of insured motor vehicle accidents are processed through the Audatex system. This huge number of accidents creates a wonderful pool of statistical data. Audatex has many other services, apart from the core business of supplying the quotation software and data, which can aid the running of the short term insurance business. Rating models, procurement data, claims flow systems, management information, pre-inspection data services are just some of the services we offer.
Back to Angelina, Brad and the statistics:
The average repair cost as processed by Audatex, excluding wrecks, of insured vehicles repaired in South Africa was as follows:
| Year | Ave. Repair cost per accident | Year-on-year % change |
| 2004 | R 12 122-00 | |
| 2005 | R 12 922-00 | 6.60% |
| 2006 | R 13 793-00 | 6.70% |
| 2007 | R 15 558-00 | 12.80% |
| 2008 up date | R 16 881-00 | 8.50% |
Of interest is the fact, that while the average repair cost was almost always way above any other index, it has dropped in 2008 for the first time below corresponding CPI, CPIx and PPI. However this year is still young and maybe Bob will step down and our average repair costs will decrease further.
(Click on image to enlarge)The split in costs of the average accident repair is almost constant over the years at 60% parts, 10% paint material and 30% labour.
(Click on image to enlarge)As the parts component has the biggest influence on the total repair costs, it is of interest to check the relation to currency of the country of origin.
(Click on image to enlarge)
Note: Currency values taken as of January each year.
The drop in the value of the Rand versus the main trading currencies seemingly has a direct impact on the repair cost, as shown from 2006 onwards. However, in 2004 and 2005 the strength of the Rand did not result in a decrease in the average repair cost – so who is fooling who?
As a last resort to bring sanity to the ever increasing cost, let us compare the average repair bill to the Audatex AudaInflation results. These are simulated accidents resulting in comparable data from month to month – also great for underwriting. The same parts, labour and paint are generated over a sample of more than 1000 vehicles.
(Click on image to enlarge)
Once more there is no reason for the average repair cost to keep rising, when even parts cost manage to reduce in 2006 – 2007. The good news however, as mentioned right at the beginning, is a drop in the percentage growth of our famous average repair costs. And this makes 2008 full of hope!
Ingo von Boetticher has been MD of Audatex SA for more than 10 years. You can contact him at Audatex on 011 – 265 2303.
