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A New Twist on Workers Compensation Insurance
By Floyd Arthur
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In a move that has many privacy advocates crying foul, the insurance giant American
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Insurance Group announced this week that it plans to outfit construction workers with
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devices that track their movements while on the job. According to the Wall Street
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Journal, the firm has invested an “undisclosed sum” in New York-based
Human
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Condition Safety, a company that manufacturers wearable technology
“designed to
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monitor the movements of employees in factories, on construction sites and at
other
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hazardous workplaces.” According to HCS, the data it obtains will help decrease on-
the-
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job injuries and reduce the cost of workers’ compensation insurance claims.
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Workers Compensation Insurance
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HCS and AIG announced the pilot program in early 2016. According to AIG’s
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Commercial Insurance CEO Rob Schimek, “the technology will help enable us to
work
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with clients to make their worksites safer places for their employees and help reduce
our
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clients’ overall cost of risk.” The current trial is being conducted at Citi Field in
New
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York. According to HCS, the data collected will provide “leading indicators of
potential
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injuries” -- for example, by recording construction workers’ movements
immediately
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before an accident occurs. The data, he says, will eventually help employers design
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workplace safety programs that target high-risk behaviors and prevent workplace
injuries.
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The idea of using technology to assess insurance risk is nothing new, nor is AIG
the only
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company to embrace the idea. Many auto insurers are already offering customers
lower
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auto insurance premiums for agreeing to outfit their cars with devices that track
data
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such as driving speed, miles traveled and braking habits. And in 2015, John Hancock
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began offering lower premiums to life-insurance clients who agreed to wear
devices that
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track their exercise habits and level of fitness. Employer-sponsored programs are
also on the
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rise as employers try to decrease health insurance costs by encouraging workers to
be more fit.
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Technological innovations are also being developed that protect construction
workers in
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other ways. For example, the prototype InZoneAlert vest developed by researchers
at
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Virginia Tech, uses GPS technology to warn road workers that a motor vehicle is
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approaching at high speed. According to Kristen Hines, a doctoral student at the
Bradley
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Department of Electrical and Computer Engineering at the university, and one of
the leaders of
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the research team, the device could be available for widespread use within the
next five years.
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Worker’s Compensation Insurance Integration Is A Long Way Off
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While the insurance industry is poised to integrate “Big Data” into its models for
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assessing risk, collecting enough information to create statistically relevant
predictive
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models is going to take time -- which means real-world integration is a number
of years
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away. Meanwhile, privacy concerns and questions about discrimination loom large.
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According to Harry Wang, a researcher at Parks Associates, a company that has been
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following the wearable tech industry for a while, increased use of employer-
mandated
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technology will undoubtedly bring more regulatory oversight. “There will be high
levels
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of privacy, security and compliance requirements,” Wang said. “There will be
high
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expectations from consumers about how the data will be used.”
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While the practice of using wearable technology to direct workplace safety
programs is
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almost certainly years away, we at Carmoon Group understand your need to
protect
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your workers--and your business--right now. So, let us help you design a
comprehensive
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insurance program that meets all of your business needs, Call us any weekday
between 9
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a.m. and 6 p.m. at 516-292-3780 to set up an appointment for your insurance review,