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A New Twist on Workers Compensation Insurance

In a move that has many privacy advocates crying foul, the insurance giant American Insurance Group announced this week that it plans to outfit construction workers with devices that track their movements while on the job. According to the Wall Street Journal, the firm has invested an “undisclosed sum” in New York-based Human Condition Safety, a company that manufacturers wearable technology “designed to monitor the movements of employees in factories, on construction sites and at other hazardous workplaces.” According to HCS, the data it obtains will help decrease on-the-job injuries and reduce the cost of workers’ compensation insurance claims.

Workers Compensation Insurance

Workers Compensation Insurance

HCS and AIG announced the pilot program in early 2016. According to AIG’s Commercial Insurance CEO Rob Schimek, “the technology will help enable us to work with clients to make their worksites safer places for their employees and help reduce our clients’ overall cost of risk.” The current trial is being conducted at Citi Field in New York. According to HCS, the data collected will provide “leading indicators of potential injuries” — for example, by recording construction workers’ movements immediately before an accident occurs. The data, he says, will eventually help employers design workplace safety programs that target high-risk behaviors and prevent workplace injuries.

The idea of using technology to assess insurance risk is nothing new, nor is AIG the only company to embrace the idea. Many auto insurers are already offering customers lower auto insurance premiums for agreeing to outfit their cars with devices that track data such as driving speed, miles traveled and braking habits. And in 2015, John Hancock began offering lower premiums to life-insurance clients who agreed to wear devices that track their exercise habits and level of fitness. Employer-sponsored programs are also on the rise as employers try to decrease health insurance costs by encouraging workers to be more fit.

Technological innovations are also being developed that protect construction workers in other ways. For example, the prototype InZoneAlert vest developed by researchers at Virginia Tech, uses GPS technology to warn road workers that a motor vehicle is approaching at high speed. According to Kristen Hines, a doctoral student at the Bradley Department of Electrical and Computer Engineering at the university, and one of the leaders of the research team, the device could be available for widespread use within the next five years.

Worker’s Compensation Insurance Integration Is A Long Way Off

While the insurance industry is poised to integrate “Big Data” into its models for assessing risk, collecting enough information to create statistically relevant predictive models is going to take time — which means real-world integration is a number of years away. Meanwhile, privacy concerns and questions about discrimination loom large.

According to Harry Wang, a researcher at Parks Associates, a company that has been following the wearable tech industry for a while, increased use of employer-mandated technology will undoubtedly bring more regulatory oversight. “There will be high levels of privacy, security and compliance requirements,” Wang said. “There will be high expectations from consumers about how the data will be used.”

While the practice of using wearable technology to direct workplace safety programs is almost certainly years away, we at Carmoon Group understand your need to protect your workers–and your business–right now. So, let us help you design a comprehensive insurance program that meets all of your business needs, Call us any weekday between 9 a.m. and 6 p.m. at 516-292-3780 to set up an appointment for your insurance review, or request a free consultation online today.

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Floyd Arthur

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