“Expected Losses” is often used to describe the sum of losses in primary casualty insurance. Loss frequency and costs are factored into Workers Compensation, Auto and General Liability program structures and pricing. But what if we could Expect Zero losses when underwriting Workers Compensation risk?
Have we become complacent with the current level of losses? Every dollar of loss is associated with an injured employee. Why do we accept budgeting for injuries every year? Can we envision a world where workplace injuries aren’t expected? There are new ways to improve how your company can protect what matters most – your employees’ health and well-being.
A significant decline in overall workplace injury frequency rates was achieved over the past several decades. According to the National Safety Council (NSC), total recordable workplace injuries have declined 20% in the last 10 years. Evolving safety and loss prevention programs along with actionable claims insights were broadly implemented to attain this reduction. However, gains from program implementation have proven to diminish over time. Workplace injuries remain at unacceptable levels. In fact, in many large companies, Workers Compensation expected losses represent the highest percentage of their total cost of risk. Additionally, despite these gains, a negative trend has emerged. The NSC has reported that injury rates requiring time away from work have increased for the past three years.
Injury prevention is challenging. One issue is that claims data used in root-cause analysis are lagging indicators. The claim (injury) already occurred. When causes are factored into go-forward safety and loss prevention programs, improvements are made. But this hasn’t eliminated injuries. There is more we can do. We frequently hear of corporate safety directors, human resources and risk managers asking for more solutions. Today we can augment lag indicators with lead indicators.
Companies with significant materials handling operations experience a high frequency of sprain and strain, i.e., musculoskeletal, injuries. It is not unusual for injuries like these to comprise the largest percentage of Workers Compensation costs. These injuries drive longer durations away from the job and higher claims costs. And most importantly, no one wants to be at risk of injury. For example, according to the U.S. Bureau of Labor Statistics, the number of warehouse workers more than doubled since 2013. In the last five years, injuries have increased over 78% for warehouse workers. These incidents are increasingly highlighted in the news and accentuate the need for a more proactive injury management process.
Today, workers shortages, combined with inflation, mean that improving workforce safety has multiple benefits beyond cost reduction. These include increased employee care, productivity, engagement, and retention. Yet, safety programs are still not universally implemented. In a recent survey by a wearable company, 49% of workers in industrial settings said they received fewer than five days of safety training; 18% said they had no safety training. Incorporating wearable technology can beneficially change these statistics and introduce lead indicator data.
Wearable devices are telematics for the body. They capture body activity that leads to strain injuries. They are real-time and continuous safety training. Wearables generate much-needed lead-indicator data. These devices can now interrupt the activity that would lead strain injuries. Through real-time alerts, workers can self-correct poor mechanics before an injury occurs.
Why and Why Now?
Telematics and safety are not new to insurance. In 2008,1, the first widely available auto telematic device. It improved risk selection and offered discounts to safer drivers. Today, auto telematics are the norm, not the exception for both personal and commercial auto.
Wearables are not new in the workplace. In fact, wearable applications have been available since the mid 2010’s. Healthcare wearables help medical providers monitor patients and gather biological data on patients. The 2 to improve productivity and deliver training and inventory management information. The transportation/trucking industry had contemplated using wearables to improve safety. They3. Yet not all applicable industries are convinced of the value of wearables. By 2020, wearable technology became scalable and produced a positive return on investment. Wearables now generate actuarially predictive credibility. Claims data analysis can identify where to use wearables to achieve injury reductions and, additionally, accurately estimate the return-on-investment.
Predicting Injury
Can a wearable device really help a company achieve Expect Zero status? It is a worthy goal. It puts the focus on employee safety. The devices capture worker motion throughout the workday. This richer data is used to identify unsafe motion that would lead to injury. It also pinpoints where management can focus its training and coaching.
色多多视频has partnered with multiple wearables companies. These companies are the leading providers of wearable technology that help prevent workplace ergonomic injuries and optimize workforce productivity. A wearable device gives two types of insights: First, it senses workers’ biomechanics and alerts a worker of risky movements such as bending poorly while lifting. Second, all data captured by the device is saved and uploaded. The data are analyzed and then displayed on the application dashboard for a workforce manager to review. Managers can see a daily report of potential issues along with suggested remedial action steps.
A proactive approach to injury prevention works. Wearables have reduced workplace injuries by up to 52% year-over-year, with a typical injury reduction rate of 45% when compared to the average annual expected injury rate4. This technology has actuarially proven it can reduce ultimate loss costs by 35% and frequency by 76% for claims greater than $100,0005.
Results like that are exactly what workers compensation programs need. Cumulative trauma and musculoskeletal injuries can also develop over time. Today’s actions often become injuries in months or even years later. The goal is to improve worker behaviors early to prevent injuries in the future.
Partnering for Prevention
The high precision with which wearable devices can predict injury outcomes makes them a game changer for workers compensation. It is now possible to integrate wearables into your insurance program.
Wearable companies also provide experts to help your organization manage the wearables program and understand how to implement steps to prevent injury. Guidance is also provided to help companies monitor the effectiveness of their wearables program. Are workers sustaining fewer injuries? Where are the more critical problem areas and can they be addressed with additional training or mentoring? Are workers performing unsafe movements that can be addressed through operational or engineering/ ergonomic solutions?
This type of early access to injury prevention has proven to significantly lower injury incidents. 色多多视频is working to help customers use wearables sooner and develop a proactive prevention strategy. Injury prevention is all about changing behaviors. No matter how sophisticated a safety program is, stronger preventative steps will contribute to further injury reductions. Wearable technology is now a proven enhancement to traditional health and safety programs.
Thanks to advances in wearable device technology, identifying potential injuries before they occur is now possible. Investing in this technology can meaningfully reduce the occurrence of costly claims makes sense. We want to do everything possible to ensure workplace athletes are returning home safe and sound each-and-every day.
About the authors
Chris Kopser is the President and CUO, Primary Casualty, Americas. He can be reached at Christopher.Kopser@axaxl.com
Elizabeth Bloch is Senior Product Line Manager and Chief Strategy Officer Primary Casualty, Americas. She can be reached at Elizabeth.Bloch@axaxl.com
Charlie Acosta is the Charlie Acosta is the Senior Executive Director of 色多多视频 at Strongarm Technologies. He can be reached at Charlie.Acosta@strongarmtech.com
[1]
[2]
[3]
[4] “The Industrial Athlete and Next-Level Safety in the Workplace” 2020, Oliver Wyman
[5] Actuarial Study of the Impact of Fuse Technology on Workers’ Compensation Claims” July 2021, Barrett Consulting
Global Asset Protection Services, LLC, and its affiliates (鈥溕喽嗍悠礡isk Consulting鈥�) provides risk assessment reports and other loss prevention services, as requested. In this respect, our property loss prevention publications, services, and surveys do not address life safety or third party liability issues. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. The provision of any service does not imply that every possible hazard has been identified at a facility or that no other hazards exist. 色多多视频Risk Consulting does not assume, and shall have no liability for the control, correction, continuation or modification of any existing conditions or operations. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any document or other communication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, 色多多视频Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with our services, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.
US- and Canada-Issued 色多多视频 Policies
In the US, the 色多多视频insurance companies are: Catlin 色多多视频 Company, Inc., Greenwich 色多多视频 Company, Indian Harbor 色多多视频 Company, XL 色多多视频 America, Inc., XL Specialty 色多多视频 Company and T.H.E. 色多多视频 Company. In Canada, coverages are underwritten by XL Specialty 色多多视频 Company - Canadian Branch and AXA 色多多视频 Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
US domiciled insurance policies can be written by the following 色多多视频surplus lines insurers: XL Catlin 色多多视频 Company UK Limited, Syndicates managed by Catlin Underwriting Agencies Limited and Indian Harbor 色多多视频 Company. Enquires from US residents should be directed to a local insurance agent or broker permitted to write business in the relevant state.
