Huge advances are being made in the use of wearable technology, from Fitbits to medical monitors. These developments matter to risk professionals because they represent new business and new underwriting tools.
By David Worsfold
By 2020 it is estimated that there will be more than 30 billion connected devices worldwide. That is more than four devices for every person alive.
A rising proportion of those devices will be so-called wearables – biometric fitness devices, smart watches, health monitors, and so on.
Each type of device has the potential to improve the lives of the owners as well as generate data of huge interest to insurance underwriters looking to refine rates, and improve loss prevention and claims investigation.
Internet of Things
That potential is multiplied when devices are linked through the Internet of Things (IoT). Unleashing that potential is what lies at the heart of the partnership between JLT Specialty USA and Altumai, one of the leaders in IoT-driven advanced analytics solution development.
This partnership is already firmly focused on producing benefits for the demanding agricultural industry, which faces many challenges, including increasing regulation, weather volatility, and a changing and reducing workforce.
These challenges are compounded by the additional necessities of ensuring worker safety and minimizing injury and the long-term health consequences of a physically demanding job.
JLT and Altumai, with insurer AIG alongside, are running a pilot project with Western Growers – a consortium of 1,100 growers in the western United States, which produces 50% of the leafy green produce and berries for the US domestic market.
At any one time, it can have hundreds of thousands of workers out in the fields.
“We want to work with Western Growers to solve one of their biggest challenges, which is the rising cost of workers’ compensation cover.
“Their field workers are bending, lifting, moving heavy loads, climbing, operating machinery – you name it, they are doing it – and we want to get better at predicting, analyzing, and ultimately mitigating the risks associated with those tasks,” says Doug Turk, Chief Marketing Officer at JLT Group.
The project, which is running a proof of concept trial until the end of the year, harnesses existing technology: “We didn’t want to create new technologies— we wanted to create new insights for our clients.
“We want to use what is already out there and then figure out which produce the best data,” says Turk.
The choice is enormous with devices that can measure a range of biometrics, to specialist devices that monitor how workers bend at the waist, how they walk or how high they are working.
The key is to find devices that are cost-effective and can work in the challenging conditions agricultural field workers often face, says Lars Skari, Founder and Managing Partner of Altumai.
“We are at a tipping point where these devices are now so common that they have matured and become cost-effective. We can also look at how they have been deployed in other industries so that we only use proven technologies that can generate relevant and reliable data.”
The pilot project is putting the devices through their paces to ensure they perform in these exacting conditions where connectivity and network availability are also significant challenges.
The belief is that if they can be proven and cost-effective in the tough, low-margin agricultural sector, then they will be readily transferable to other industries.
The data produced by the devices will be made available to clients and insurers in a series of dashboards, which will highlight the most relevant data for different users.
“There is a huge opportunity to use the data to improve overall operational efficiency,” says Skari.
“The data you need to present a better insurance risk overlaps with health and safety, and compliance. It can help avoid incidents in the first place, providing more context around claims, with a better understanding of what happened at the time of a claim, and before the claim incident occurred.
“Some of the compliance requirements about taking breaks and working in heat in states such as California are quite demanding but very difficult for growers to monitor. Our data will meet that challenge.”
In doing so it will help prevent other claims, says Aaron Bueler, Executive Vice-President and Managing Broker for JLT Re in North America: “Fatigue is a major factor in workers’ compensation claims. By using the data to learn more about best practice for their workforce, the client will also be able to improve their risk profile.”
Workers’ compensation costs have been coming down over the past ten years through initiatives that create medical networks and reduce pharmacy charges, coupled with a gradual reduction in claims frequency, says Bueler.
He adds: “There has been a series of developments to reduce costs and this could be the next. Clients are going to have to look at these new technologies to continue these trends.”
Insurers will benefit too, says Skari, as they will be able to use the data to produce more accurate reserves, improving capital efficiency.
The aim, once the final trials are completed and a large enough dataset has been built up, is to have a major roll-out by the middle of 2018, but the research and development won’t stop there.
“One thing that is always changing is the functionality and price-points. We understand what wearables can do today, but we know it is going to change over time. We’re always looking to design for the future, as well as for the present,” says Simon Prowse, Co-Founder and Managing Partner of Altumai.
This passion for exploring the potential of technology and the data it can generate is shared at JLT.
Turk explains: “JLT is investing heavily in the new world of insurance. The Western Growers project is just one of several InsurTech projects we are running. We have to be innovative and be pursuing research and development or we will be passed by.”
Please contact Douglas Turk on +1 (310) 739 9382 or firstname.lastname@example.org