Speaking with Internet of Business earlier this month, AIG’s EVP construction casualty leader Tom Grandmaison detailed the firm’s pilot project, which uses wearables to protect workers out in the field, and what benefits the firm is expecting to see in future.
Insurers are often criticised for lagging behind other industries when it comes to adopting new technology. They are seen as dour, maintaining the status quo and treating new ideas, new ways of working, with more than a hint of suspicion.
In many ways, this perception is harsh, and yet you can see how it came about; after all, the insurance industry has survived for almost 300 years on risk adversity. Indeed, some might say that the business model of insurance is polar opposite to the ‘fail fast’ model operated by most start-ups today.
Yet, as evidenced at our Internet of Insurance summit in London this June, some insurers are changing tact. AXA Healthcare is using biometric fitness bands to track the health of its customers (click here for video interview), while Vitality has reinvented insurance models with incentive-approach. Aviva, Progressive, and others are adopting usage-based-insurance (UBI) models in the auto insurance world.
AIG is another insurer trying new things and embracing new products, through its new partnership with Human Condition Safety (HCS), an early-stage technology start-up company developing wearables, analytics, and systems to improve worker safety.
The project started as a result of one of AIG’s “innovation boot camps” where diverse teams from across the organization, including underwriters, actuaries, claims, operations and legal partners look to brainstorm and develop new products, services and processes. One bright spark suggested the idea of a wearable device to monitor the safety of workers in the field.
A simple idea soon transformed into something bigger, in January 2016, AIG announced its strategic investment in HCS.
As a result, the two firms are now working on a proof-of-concept project where a small device is placed in a traditional safety vest or helmet, with multiple sensors capable of observing how the worker bends or twists, feeding this back to the database for observations to be catalogued. It can also detect when a worker carries too much weight, gets too close to dangerous equipment, or enters an environmentally risky area.
“If it’s not a good bend, you have the opportunity to go and talk to the worker and say ‘think about making a lift this way’ and just give proper guidance,” says Grandmaison. “That’s the piece where we have the opportunity to prevent accidents from happening whether it be for one worker or 100s.”
“Wearables offer us the ability to observe human behavior and gain insights that can help workers adopt safer behavior before an accident happens. We think there’s a tremendous opportunity to help customers understand risk and partner with them to take steps to prevent it”.
Industries excited by wearables
It remains early days for this project –and Grandmaison believes that there’s huge potential for this technology to have a profound impact in manufacturing, warehousing, retail, hospitality and healthcare too.
He adds that the HCS solution could add benefit to any places where workers are being themselves in potentially dangerous situations and conditions.
“Clients who have seen the HCS’ technology believe that it is something of tremendous value and potential.”
“I guess from my own perspective perhaps when we first thought about this, we weren’t necessarily thinking beyond the workers’ comp space… but now we are, for instance looking at how the technology could be used to help improve worker safety in other industries, too.
What are the benefits?
AIG’s Grandmaison believes that the firm will likely see numerous benefits from the wearables programme, not only the “enormous” economic benefit for both the firm and its clients (who will save on claims and possible healthcare bills), but also improving client relationships.
“AIG is geared to focus on becoming our clients most valued insurer and one way we intend to do that is to help them better understand risk and to help them and the customers they serve.”
“The clients themselves are focused on this. Many clients and their customers are talking about [IoT] and not just in our industry. They are investing in IoT because there’s so much potential there.
“Research firm Gartner indicated that by 2020 half of new major business processes will incorporate some element of IoT, so it’s a real disruptive change.”
AIG is also working on a number of projects at R&D phase, including drones, Virtual Reality in training, and intends to spend most of the remaining year showing HCS to a ‘handful of customers’, with the aim for further roll-out in early-to-mid 2017.
IoT and risk management
Grandmaison believes that the Internet of Things could aid risk management for insurers, helping protect customers from liabilities, providing they’re up for the transformative change.
“I think it’s going to continue to evolve rapidly. Just look at the auto industry and the way tech is playing into that with autonomous cars. From an insurance perspective, we are keen to work with companies across all industries to help them take advantage of these new technologies.”