Same Goal, Different Pressures: Building Managed Repair Partnerships on Mutual Understanding

The premise of managed repair is straightforward: rather than insurance carriers reimbursing policyholders directly for property damage, carriers refer claims to a managed repair program. The MRP coordinates documentation of the repairs necessary to return the structure to its preloss condition and, where selected by the property owner to effect those repairs, oversees repairs through a network of preapproved, vetted contractors.

But as much as all stakeholders in the managed repair ecosystem share a common desire to restore policyholders’ homes, lives and businesses, the underlying concerns and priorities that each is grappling with can be worlds apart. As a third-party administrator, we have a vantage point on this disconnect — and on the importance of mitigating it.

We know that the pressures contractors absorb today could show up tomorrow in cycle times, estimate accuracy and the policyholder experience. So, in the interest of increased understanding, we recently asked our network of insurance restoration professionals to share what’s really happening inside their businesses. The takeaway for property claims leaders is not just in what contractors told us, but in what their feedback may indicate about the challenges and opportunities ahead.

Cost of Doing Business: The Defining Concern for Restoration Businesses Today

Operating pressures, including project delays, cancellations, safety concerns and escalating insurance-related costs, were recurring themes throughout contractor feedback, with rising material costs, economic uncertainty and labor shortages topping contractors’ list of worries. Material costs especially stood out because concern about them was nearly identical in every U.S. region, emphasizing that this is an industrywide structural pressure rather than a short-term, geography-specific issue.

None of these trends were particularly surprising given current headlines, but what’s interesting is how contractors are handling them. When asked how the labor market is affecting their pricing, 58% said they have absorbed higher labor costs to keep their prices steady, yet only about a third have raised prices on their jobs. That pattern holds in every region and at every firm size, from two-person outfits to shops with more than 100 employees.

Although steady job pricing may sound like good news for carriers, the rising underlying costs contractors are facing create an increasingly unsustainable model for the managed repair ecosystem. If contractors continue to absorb higher operational expenses without corresponding pricing adjustments, the industry could see mounting labor challenges, longer project timelines, greater strain on the customer experience and increased pressure on contractor profitability. Over time, these dynamics may contribute to network contraction as some firms scale back operations or exit the market altogether.

Impact of The Labor Market Can Be Felt Well Beyond Pricing

Nearly nine in 10 (86%) insurance restoration contractors said the labor market is affecting their business. More than half find it harder to hire qualified workers, and a similar percentage report rising wage expectations.

The effects extend well into contractors’ day-to-day operations. The most common result is longer job cycle times, followed by effects on pricing and their ability to scale projects. For claims leaders, the real concern here is cycle time, as faster repairs ultimately drive policyholder satisfaction.

It’s worth noting that the labor market impacts felt by contractors vary by geography. Labor shortages are the top concern in the Northeast and Midwest but barely register in the Southwest and West, where economic uncertainty leads instead. The size of the firm matters too, as midsized firms with 26 to 75 employees are more than twice as likely as smaller firms to name safety and insurance pressures as their biggest concern.

The question for the industry is how to create the flexibility needed to sustain a healthy managed repair ecosystem while continuing to drive consistency, estimate accuracy and customer outcomes. Managed repair stakeholders, including carriers, networks and contractors, each play an important role in controlling loss adjustment expense through disciplined documentation, transparent estimating practices and effective repair oversight. Absent that flexibility, contractors may increasingly pursue alternative business opportunities, reducing available network capacity and making it more difficult to deliver the estimating expertise, repair quality and policyholder experience carriers have come to expect.

Increased Industry Collaboration

Unsurprisingly, nearly every contractor we surveyed uses technology; only eight of 473 said they don’t. The most common uses are cost estimation and scoping, communications and documentation, and project management. Contractors are also adopting tools in the field for drying and remediation, moisture detection, and damage assessment.

This is encouraging. Estimation and documentation have historically been the points where carriers and contractors get stuck in back-and-forth. Shared digital workflows such as real-time photo documentation, live video and consistent estimating platforms can shorten review cycles, improve indemnity accuracy and cut the friction that frustrates adjusters and contractors alike. The industry is also seeing how technology can help bridge this gap. Solutions that improve estimate quality, accelerate review workflows, increase project visibility and leverage AI-assisted decision support are reducing friction across the claims and restoration process.

Understanding Must be Followed by Action

To strengthen the managed repair process, carriers must not only understand the burdens their restoration partners face but also collaborate on solutions that benefit the industry as a whole. We’ve taken the first step with the 2026 Managed Repair Market Report, but acknowledging the state of the industry can’t be the end of the story. Carriers and program partners must now use these insights to make smarter decisions for the future.

Managed repair depends on effective coordination among carriers, contractors and policyholders. As carriers shape their future claims and vendor strategies, these market dynamics should be an important consideration in strategic planning to help preserve network capacity, sustain performance and continue delivering the customer experience policyholders expect.

Malcolm is president of U.S. Network Solutions at Crawford & Company.