With new technology solutions emerging seemingly every day, there's a lot to be excited about.
A segment in flux
New solutions couldn't have come at a better time as the workers' compensation market faces challenges related to stubborn inflation, increased wages and rising medical costs.
At the same time, competition has increased. New players have emerged, and many carriers in this space are going after the same market share. Increased competition has brought down rates, too, as insurers compete for the same business.
Workers' comp, reimagined by technology
Innovation is happening at a rapid clip, thanks to emerging insurance technologies, or insurtechs, that are enhancing the way insurers select risk, underwrite policies, manage the claims process, support insureds and more.
Ultimately, with more competitors in the workers' comp space than ever before, insurers are leaning into insurtech to gain an advantage over the competition.
There have been multiple waves of insurtech. The first wave was centered around disruption with a focus on streamlined quoting solutions. The next wave is about how to create true product differentiation.
A case study: adding value with AI-enabled solutions
Beyond using technology to streamline quoting, optimize underwriting and manage claims, insurers are using AI-based tools like CompScience to help their insureds boost safety and reduce their workforce risks, and these value-added extras are helping set them apart in the workers' comp market.
CompScience creates an executive risk report that details what they learned from the video footage and outlines their recommendations. For example, when the team ran an analysis for a manufacturing client, they identified a risky behavior—climbing over a conveyor belt—and were able to determine that it happened more than 600 times.
They recommended that the client install a liftgate for employees to use instead of hopping over the line, and that stopped the unsafe behavior immediately engineering the risk out entirely.
With this single effort, they were able to increase the safety of the employees while reducing the costs of both insurance and claims for the employer, creating a win-win scenario.
A wide-open future
Insurtech has the potential to transform the workers' compensation sector by leveraging technology to create safer work environments, help insurers optimize their risk portfolios, streamline the underwriting and claims process and more. Insurtech solutions like surveillance camera risk technology are already making strides and driving positive change in the industry.
Looking ahead, one thing is certain: Insurtech is poised to play a pivotal role in the future of workers' comp. In the current landscape of declining rates and more competition, innovation is more important than ever as insurers work to differentiate themselves from their peers.
