Insurance Exec Touts Technology as Game Changer for WC Policies

Sarasota, FL (WorkersCompensation.com) – The number of packages delivered by UPS drivers in a single day has doubled in the last 15 years. Technological advancements have led to dramatic increases in productivity.  

What if the same types of technologies were employed to reduce injuries – and usher in a new version of workers’ compensation policies, in which the insurer provided policyholders certain technologies free of charge to the benefit of all concerned? 

“It’s a question we asked one year ago,” said Haytham Elhawary, CEO of Kinetic Insurance. “If you look at a typical workers’ compensation policy, about 60 to 70 percent of it gets spent on claims, or the legal costs associated to claims. So really, our thought process here is, ‘look, if I can provide you with technology that can reduce this, then I should be able to give this to you at no extra cost and it should be able to pay for itself and have some leftover at the end.’” 

During a session at the recent RIMS annual conference, Elhawary outlined the idea he said is in its infancy, but could lead to workers’ compensation 2.0. 

Safety and Technology 

Technology that has vastly improved productivity in recent decades has been slower to improve workplace safety. For example, much of the personal protective equipment that is still used in industry was designed early in the 20th century. 

“Globally we are looking at one million injuries that happen every single day,” Elhawary said. “What we’re doing to keep workers safe isn’t really enough … it’s not cutting it.” 

The good news, Elhawary says, is that things are starting to change and companies are beginning to use newer technologies to improve worker safety. Wearables that can reduce injuries, exoskeletons that help relieve the loads on workers and hard hats embedded with communication equipment and GPS trackers are making their way into operations.  

One such company, for example, is Frito Lay. Workers in its many manufacturing facilities sustained injuries often due to improper body movements. The company began incorporation wearables to help reduce injuries  

 “The product itself was a small, wearable pager-type device on your belt,” Elhawary said. “Whenever you perform an unsafe movement with your body, the device can detect it and it will vibrate.” 

Workers who bend at the waist or do awkward twisting would feel the vibration after the movement. The goal is to create awareness whenever the employee is doing a high-risk movement that puts him at risk of injury.  

“The idea is if workers are provided with this real-time coach, they are capable of changing their behavior, capable of self-correcting, reducing the number of times that these unsafe movements happen,” he said.  

The devices were effective, Elhawary said. “There was 26 percent reduction in high risk movements,” he said. That’s great, but what does it mean? It Means about a 20 percent reduction in injury rates after 6 months.” 

Most of the injuries at the facilities were sprains and strains, which can involve long recovery times. The reduction in those injuries led to a 44 decrease in days when workers were either out of work or doing alternative, light duty jobs. 

The device has another benefit; it collects data. 

“Each high-risk movement is sent to a dashboard,” Elhawary said. “You can see things like who are the workers with the highest risk, with the highest number of these unsafe movements; which job types are putting my workers at highest risk. You can design interventions around that.” 

WC Policies 

“Workers’ compensation insurance is very transactional,” Elhawary said. “You have an injury that leads to a claim, we manage it and we pay for that claim. That’s really it. 

He said the ‘new version’ of the workers’ compensation policy involves the insurer providing the policyholder with free, appropriate technology to enhance safety among workers. Done correctly, it can benefit all involved. 

“For the policyholder, their claims are going to go down,” Elhawary said. “That means ultimately it will lead to lower premiums.” 

The reduction in injuries also translates to fewer disruptions in operations to replace injured workers with temporary workers or asking other workers to take up the slack. 

“For the frontline worker it’s a no brainer as well,” Elhawary said. “You’re providing technology that reduces injuries, so they feel like they are being cared for by their employer.” 

Insurers benefit because the reduction in claims translates to higher profits. And brokers will be able to offer a differentiated insurance product. 

“So this version of workers’ compensation, where we provide you with technology to prevent claims from happening in the first place is the future of workers’ compensation because it benefits every single stakeholder in the ecosystem,” Elhawary said. 

The company recently partnered with Nationwide to implement the idea. Elhawary is confident it will take off. 

“Not only do we believe it’s the future of workers’ compensation, but all types of commercial insurance,” he said. “Where there is technology available to help reduce claims from starting initially the economic incentives are such that reduction in claims should cover the cost of the technology.”