This will be an exciting year for the restoration industry, as technology accelerates opportunities for restorers to improve operations, reduce costs, and increase profitability. After working with different groups across the industry, including carriers, third party administrators, contractors, and independent adjusters, it is clear that change is coming. Here are three trends I predict will reshape the industry in 2019 and beyond.
THE FUTURE OF RESTORATION
After working with Encircle users around the world to test products and develop new processes and standards, I have seen the successes and challenges within the restoration industry from many different perspectives. The global restoration industry faces similar challenges no matter where you go in the world and a central factor is the lack of connection between restorers and carriers. The good news is that change is on the horizon to bridge that gap.
1. Adoption of New Technology
We will continue to see a shift in thinking as owners recognize that technology purchases are not simply an expense but a productivity investment that helps contractors be contractors, while also drastically reducing administration overhead.
Increasingly, we will see the restoration industry proactively adopt new technology. This will be the driving force behind how the restoration industry will work collaboratively and effectively with other stakeholders to achieve common goals. Carriers know that the current model isn’t sustainable and won’t yield the results they want, which is why they’re also now adopting new technology. Companies that once feared transparency are now embracing it to create a cohesive relationship between restoration and insurance companies.
In the same way that Uber transformed the the taxi cab industry, technology is playing a central role in creating more effective processes in the property and casualty insurance industry. Similar to how Uber shows you where driver vehicles are on a map and expected travel cost, a mobile app like Encircle (on Android and iOS) makes it easy to share photos of a loss among stakeholders and provide status updates, creating transparency between restorers, insurers, and policyholders. When you can see work being done in real-time, it not only enables work to be completed in parallel, it enhances the user experience and creates trust.
2. Shifting Responsibilities Within the Industry
The second trend you’re already starting to see is the shifting of responsibilities within the industry. Independent adjusters and TPA businesses are starting to adjust their operations to allow for more specialized experts in the field and less routine assignments. Most carriers recognize that with margins already thin, deep cost cutting cannot keep coming from the contractor on the actual work in the field, so something has to change. This might not be fully realized in all markets, but as a trend, carriers are exploring ways to gain efficiencies.
The biggest opportunity for carriers is to reduce the significant administrative costs associated with handling a claim. Adjusting time, manual systems, third parties, internal legacy systems and the lengthy claim review process all lead to longer cycle times and a heavy administrative burden. Restorers are going back to being more of a partner to carriers like they were 20 years ago, and technology is enabling that partnership.
Restorers can function independently just as well if they are helping their customer (the insured) provide the paperwork and supporting documentation to the carrier to justify payment of expenses.
3. Investing in People and Knowledge
The third trend that is coming relates to the technical side of the industry. Restorers are going to have to up their game and get really good at what they do because as technology adoption drives greater efficiencies and increased transparency, it will make it harder to be a sloppy contractor. This will also allow the better contractors to succeed.
Most restorers are not looking at their business from the 20,000-foot mark. Twenty years ago, there were less courses to send staff to and the science of restoration wasn’t as complex or well studied. Downward pressure on pricing has already impacted the technical capabilities of contractors and their ability to invest in training, but it is essential. At the same time, you have market conditions where staffing is incredibly hard - wages need to be higher to attract dedicated workers to this line of work, and retaining good staff is costly.
Don’t kid yourself, pricing concerns will always exist. However, the ability to do good work and reduce safety concerns and liability issues on the job will move the industry towards a better place.
FIND YOUR WAY
With technology driving many of the changes in the industry, you need to adapt. Think of technology as a productivity tool - a way to do more work in less time, in a way that aligns with your needs and the needs of your customers. Restorers should carefully select the right technology that works for them, because not all technology is the same. Choose your technology based on your needs, not the needs of others.
Let us show you how Encircle can help you get the job done right, fast.