CCC Eyes Digitizing Parts Ordering as AI Transforms Auto Claims

CCC Intelligent Solutions delivered second quarter results that show increasing traction in using advanced technologies — artificial intelligence (AI) included — to improve auto claims estimates, resolution and payout workflows.

The company posted revenues that grew 10% year over year to $192.8 million. 

CEO Githesh Ramamurthy said on the conference call with analysts that “the auto insurance economy is being impacted by multiple headwinds, including staffing shortages, inflation, supply chain issues, increasing vehicle complexity, and rising consumer expectations.” Auto claim counts, he said, have rebounded in the wake of the pandemic and are now less than 10% below pre-pandemic levels. Along the way, the cumulative days of claims has reached 2 billion days, and repair costs have grown by double digits over the past couple of years.

During the call, he said that CCC Estimate STP, the company’s claims estimate software, has been able to provide estimates in seconds or minutes through digital channels, reducing cycle times that typically take hours or days. Roughly 30% of claims are inspected by consumers by the mobile phone cell service channel, but 45% are inspected in the repair facility, and about 25% are inspected by insurance staff in the field, said the CEO. 

STP, management noted on the call, is still only about 1% of the company’s total volume. 

AI, he said, has been boosting efficiencies, helping insurers “more efficiently and effectively identify risk” and streamline the claims process. The company now has a trillion dollars of historical accident data on hand. CCC noted in its earnings materials that it has added nearly 1,000 repair facilities year to date. CCC’s total customer count now exceeds 35,000.

Drilling down a bit into results, management noted that parts represent about 5% of sales, but is a segment that is growing more rapidly than the company overall, and represents a significant opportunity. 

“Only about 15% of industry parts volume is ordered electronically through the CCC network. We believe that CCC has the opportunity to increase that percentage over time because our electronic parts ordering solutions help improve operational efficiency for automotive OEMs [original equipment manufacturer],” and other stakeholders, Ramamurthy said. 

Cross-Selling Traction

CFO Brian Herb noted on the call that seven points of the revenue growth in Q2 was driven by cross-sell, upsell and adoption of solutions across CCC’s client base, including the upsell of repair shop packages. Over time, according to commentary, 80% of company revenue growth (forecast to be in the 7-10% range in terms of organic growth) will stem from cross-selling opportunities.

Asked on the call about trends in the industry, Ramamurthy said, “With the visibility of the data that comes through the platform … one thing we are seeing, I would say at a macro level, is that when we talk to our clients across the entire economy, whether it is OEMs, car companies, parts providers, insurers, repairers, there’s a general sense of leaning in to use technology more aggressively than they were in the past to improve efficiency.” 

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