Total Insight Q2: Where Our Cycle Time Stands and the Path to 30 Days

Earlier this year, Salvato Auctions started publishing the average performance metrics we deliver across every insurance company we work with. We call it Total Insight, and we update it every quarter.

We do this because cycle time drives almost every metric that matters in a total loss claim, and because carriers should be able to see their auction vendor's actual performance in full transparency - rather than operating on faith. Publishing our performance quarterly is how we make that possible.

Here is where we landed in Q2.

The Numbers:

We track these three milestones specifically because each one carries a distinct financial consequence:

• Faster pickup reduces advance charges
• Faster settlement improves policyholder retention and reduces inflated bodily injury claims; and
• Faster sale increases gross and net salvage return

What the numbers tell us

The most useful finding in Q2 is not the average. It is the spread underneath it.

Within Assign-to-Pickup, our best-performing carriers are averaging 0.4 days on the Assign-to-Release step in particular, in partnership with our Operations team who works hand-in-hand with on this step. Those same carriers were running 2.5 to 3.0 days on that step with their previous auction vendor.

That is roughly a sixfold improvement on the same step, with the same claims teams, under the same conditions. It establishes what the process is capable of when the digital handoff between a carrier's system and ours is fully in place. Closing the distance between 0.4 days and the current average is the largest cycle time opportunity in front of us for this segment, and it is one we work on account-by-account with each carrier's claims team.

The Assign-to-Settle window tells a similar story from a different angle. This is the hardest stretch of a total loss claim right now, and it is where market conditions show up most directly. Negative equity scenarios now account for more than half of industry-wide total loss volume, and a growing share of vehicle owners are overfinanced, underinsured, or both. Every one of those situations adds steps to the lien payoff and settlement conversation. Offsetting that dynamic, our timeframe to receive sellable titles got 0.6 days faster in Q2, through our partners at the National Digital Titling Clearinghouse and the National Title Exchange.

As the underlying market gets more challenging, the more our dual-integration titling model matters to ensure we route every vehicle down its most efficient path to title.

What we expect by Q4

We expect to take 6 to 8 days out of end-to-end cycle time over the remainder of this year. The key driver for that is regulatory change and other improvements we are positioned to take advantage of across both of the nationwide title transfer solutions we use.

That work should begin showing up in our Q3 numbers and land more fully in Q4, bringing end-to-end cycle time from assignment to auction to roughly 30 days across all customers. That is best-in-class in this industry, and we will publish the result either way.

On auction returns

Cycle time compounds into net salvage return in three direct ways: lower advanced charges, lower auction fees, and less vehicle depreciation before the vehicle reaches auction. Every day removed from the process shows up in the final number.

Across all customers we are averaging a 28.3% gross return on an average actual cash value of $13,500. One piece of context matters here: gross return scales with ACV across this industry, where roughly every $1,000 of additional average ACV corresponds to about a 1 percentage point increase in average gross return. So as our average ACV continues to approach the industry average, we fully expect our gross return to continue increasing accordingly.

What comes next

We are proud of what our team is delivering, and are confident these metrics are best-in-class in the industry. We have a clear vision of where our next gains come from, and will continue publishing what the metrics that matter in total loss claims should look like when the process is running the way it should be.

Q3 numbers publish next quarter.

Want to see what this is worth on your book? Run your own numbers with our seller calculator at SalvatoInc.com/sellers, or email businessdevelopment@salvatoauctions.com to set up time with our team.