Hard hats are the symbol of safety. But more high-tech “wearable devices” could make for a safer work environment. And a safer scene could yield fewer workers compensation issues.
Wearable technology — defined as devices worn by an individual to track and store information related to health and fitness — has emerged as a new frontier in safety, worker protection and workers compensation management.
One example of how tech could work in workers comp: SmartCapTechnologies created a trucker’s hat that tracks brain waves to detect when the wearer is getting drowsy or falling asleep, triggering a smartphone alarm or alerting a dispatcher. The idea for the device came from the Australian mining industry, according to Claims Journal magazine.
Workers compensation costs are significant, as shown by statistics from the National Council on Compensation Insurance (NCCI):
- Average costs are $23,500 in indemnity for lost-time claims for workers compensation insurance carriers and state funds, according to 2015 data.
- Medical costs add up to $28,500 per claim.
- And the trend lines keep going up: The average indemnity cost per claim for lost time was up 138% from 1995 to 2013, while medical costs per claim went up 214%. Could wearable tech ease the strain on the workers compensation premium payer?
Could wearable tech ease the strain on the workers compensation premium payer?
| Increase in Average Cost for Workers Compensation per Lost–Time Claim | Indemnity Cost | Medical Cost |
| 1995-2015 | +138% | +214% |
Source: National Council on Compensation Insurance (NCCI) Financial Call data for private carriers and state funds in states where NCCI provides ratemaking services.
Anything that can disrupt the upward trend in workers compensation costs could be popular. If wearable tech can slow the growth rate of those costs, or even reduce them, it’s a benefit for policyholders such as manufacturers, healthcare providers, transportation firms, construction companies, and other workers compensation insureds. And a safer workplace is of course a plus for workers.
Consumers are flocking to gadgets such as fitness trackers. A 2016 report by insurance analysis firm Celent noted that 10% of consumers “use a Fitbit or other wearable health monitoring device.”
One prediction: Within three years, 170 million wearable technological devices will be in use, according to a March 2016 presentation, “Wearable Technology: Trends and Opportunities for Organizations,” at the Academy of Marketing Science.
Another: Technology manufacturer Cisco forecasts that North America will have 180 million wearable devices by 2020, up from 38.6 million in 2015.
What will the future hold for wearable technology use in workers compensation? Innovators need to create specific applications for employers to use to address the basic risks of the work their employees perform. For example, a wearable shirt for firefighters that monitors heart and respiration rates got our attention.
But issues of privacy are huge. Just one concern — how much an employer can assert the right to know an employee’s health information — is a yet-to-be-settled issue.
Amerisure noticed a few years ago the potential of wearables to enhance safety, and we will keep an eye on wearable technology.
