In the first of a three-part series, The National Council on Compensation Insurance explored several carrier perspectives on the latest trends in safety technology in the workplace.
There's a growing buzz in workers compensation that technology, the workplace, and the role of workers are changing more dramatically today than ever before. Along with shifting jobs and evolving workplaces come new and changing exposures to worker injuries with questions continuing to arise about the status and evolution of safety technologies.
The National Council on Compensation Insurance (NCCI) explored several carrier perspectives on the latest trends in safety technology, speaking to AF Group, EMC Insurance Companies, Erie Insurance Group, and Nationwide Mutual Insurance Company.
The carriers shared their perspectives on questions including:
1) What are these safety technologies and what do they do?
Carriers are currently using or exploring multiple types of safety technologies in the workplace, including:
Wearables. A wearable may include sensors that are worn on the body. Industrial wearables are generally classified into four categories by function:
- Monitoring—Wearables may monitor a worker's physiological responses, such as body temperature, pulse rates, and oxygen levels, as well as environmental conditions, including air temperature, CO2 levels, and noise. Wearables may also monitor a worker's proximity to other workers and potential hazards in the workplace.
- Supporting—An exoskeleton is a type of wearable that is used to support and assist a worker's movement or augment the capabilities of the human body. Some exoskeletons may incorporate haptic technology, which can create an experience of touch by applying forces, vibrations, or motions to a user. These may serve to alert the user or allow for interactive action.
- Training—Virtual reality (VR) and augmented reality (AR) helmets are examples of wearables that can provide simulated training for workers.
- Tracking—Wearables may track a worker's location.
Artificial intelligence (AI) and computer vision. Computer vision and AI systems use cameras to help detect unsafe movements and hazards in the work environment and provide real-time warnings. An employer can use these technologies to evaluate, assess and take actions that prevent worker injuries.
Internet of Things (IoT). IoT sensors are pieces of hardware that can monitor changes in an environment, including temperature, pressure and motion, and collect data about those changes. If these sensors are connected to a network, they can share data with that network.
Software applications. These can work together with video recordings or other tools for a more complete risk assessment. For example, an employer can use a mobile phone to record a video of a worker performing various tasks, and then upload the video to a software application to assess risk and hazards and suggest improvements.
Drones. Unmanned Aircraft Systems (UAS) can evaluate certain exposures without putting workers at risk for injury. For example, drones can evaluate roofing conditions and cell phone towers, as well as monitor air quality in confined spaces.
The carriers interviewed reported that analysis of the data and the resulting safety enhancements are critical to the successful implementation of safety technology.
Currently, the carriers interviewed said they rely primarily on results and tools provided by safety technology vendors and are still in an early stage of analyzing the data to quantify any impact on claim frequencies and severities.
While the return on investment from utilizing safety technology can be measured through data analysis, other impacts—such as improvement in worker safety and reduced disruption of operations—are harder to quantify but may be of even greater value.
2) Are there specific injury types or industries that may benefit more from newer safety technologies?
Back injuries, including sprains and strains, are an area of focus for safety technologies, according to the insurers interviewed. Back injuries are especially prevalent in the manufacturing, logistics, and warehousing industries and can be costly.
Lower back injuries rank first in lost-time claim counts (roughly 12%), third in claim dollars (roughly 11%), and “middle of the pack" in average severity, which is about $40,000 per claim, according to NCCI's data on injuries from 2016-2021. The top three body part injuries that involve lost-time claims are lower back, knees, and shoulders.
Since back injuries are relatively common in the manufacturing, logistics and warehousing industries, interviewed insurers identified these industries as most likely to benefit from advanced safety technology. They noted that, while the current safety technologies are more prevalent in traditional four-walled environments, such as warehouses, advancements in safety technologies are expanding to other workspaces.
3) What are the obstacles to implementation?
Privacy concerns, cost and return on investment (ROI), company culture, and change management are all potential obstacles to implementing safety technology.
Privacy Concerns. While safety technology is generally known to collect environmental information about a worker's surroundings rather than specific medical or health information, workers may hesitate to wear the devices as they may not fully understand or trust what is being done with the data collected. In addition, certain state laws and regulations may impact the type and scope of the data that employers can collect.
Cost and return on investment (ROI). The affordability of advanced safety technology is another perceived obstacle to implementation, at least until insurers more thoroughly analyze data to evaluate the technology's effectiveness. Some of the safety technologies are still in development, and there is not enough data to measure their effectiveness in reducing claim frequency or severity.
Employer culture and change management. One interviewed insurer noted that, for safety technology to be successfully employed and adopted, the insured must highly value a culture of safety, which includes support from executives and buy-in from workers and middle management. A greater likelihood of success was observed in companies with a high level of commitment to loss control. Furthermore, companies were more likely to widely adopt safety technologies if they could also leverage them to improve operational efficiency.
4) What is the future of safety technology?
According to all insurers interviewed, advanced safety technology will be part of the future of workers comp. However, one key to success will be the ability to analyze and fully understand data from these technologies.
As one interviewee said, “Safety technology will point out problems but may not point out solutions. But pinpointing the problem could lead to a solution."
As the workers compensation industry focuses on underwriting risks, claims costs, and improved outcomes for injured workers, it is natural for stakeholders to explore new ways to prevent or reduce worker injuries.
During their interviews, NCCI heard exciting comments about the growth of technologies powered by artificial intelligence and increased computing power. But none of these would make for a safe workplace without employers adopting a culture of safety and embracing the benefit of a safe workplace for employers and employees alike.
Check out the complete report or review the highlights video, and stay tuned for the next installments of this safety series with perspectives from technology vendors/suppliers, and insureds.
NCCI authors include Damian England, division executive affiliate services, Raji Chadarevian, executive director—actuarial research, Yuchen Su, research actuary, and Laura Kersey, J.D. division executive—regulatory & legislative analysis.