By BECKY GILLETTE
Technology is changing the way the insurance industry operates, with some applications including telematic devices that are used to track the safety of drivers.
There is some research, including a recent academic study published in the journal Marketing Science, that shows improvements in driver safety as a result of feedback provided by telematics devices, said Andre P. Liebenberg, Ph.D., Robertson Chair of Insurance, University of Mississippi. Liebenberg said this can also result in savings on insurance for customers.
“It is difficult for insurers to charge each person the price for their own riskiness, so they have historically charged prices based on the average riskiness of the risk class that you belong to based on observable risk factors like age, gender, and accident history,” Liebenberg said. “But drivers who believe they are safer than the average driver in their risk class might feel they are paying too much for insurance, and choose to shop around for a better deal. So, the more precise risk classification offered by telematics allows better drivers to pay lower prices and allows insurers to have a more stable customer base.”
Some people find this too intrusive, but Liebenberg said insurers overcome this by making it voluntary.
Drone inspections of property damage are also growing in popularity. Leibenberg said this is another example of where technology can improve the cost efficiency of insurance.
“Insurers that embrace this technology should see benefits not only on the claims side but also before losses occur in terms of underwriting where drones can help underwriters identify risks, recommend appropriate loss control, and price the risks more accurately,” she said. “Insurance consumers should benefit through lower premiums and faster claims settlement.”
John Langcuster, State Farm Insurance vice president, agency/sales, Ridgeland, said State Farm has been testing safety and business applications of drones since 2015.
“In 2018, the FAA granted State Farm the first national waiver for any company to conduct drone flights beyond the pilot’s visual line of sight for catastrophic assessments,” Langcuster said. “Drones are currently being used in our claims operations as an additional tool for claim representatives during individual roof claims (aerial roof inspections) primarily for wind and hail damage, and to assess widespread, catastrophic damage typically after hurricanes, tornados or wildfires. Time, safety and cost are all potential benefits, and we’re always looking at how we can operate as efficiently as possible for the benefit of our customers.
“Assessing roofs is an important part of the claims handling process and our claims associates have safety measures in place. Depending on factors such as trees, power lines, flight restrictions, or poor visibility, claims associates may still need to climb on the roof to confirm damage.”
State Farm’s product called Drive Safe & Save, introduced in 2009, can be incorporated through its Drive Safe & Save Mobile App or OnStar. Customers can earn a discount of up to 30 percent or more, based on individual driving behavior and/or miles driven.
The program collects information about an individual’s driving characteristics, which may include things like annual mileage, acceleration, braking and cornering, to determine a customer’s premium discount. Additionally, Langcuster said Drive Safe & Save Mobile customers can view their driving scores and an interactive map of their driving behaviors for each trip through the Drive Safe & Save app, providing feedback that empowers drivers to help them become safer drivers.
“Participation is voluntary,” he said. “For some, they are comfortable participating and sharing the data in exchange for the discount. For customers who choose to participate, we take their privacy seriously and maintain safeguards to protect customer information and comply with federal and state laws.”
The State Farm Mobile App allows customers the ability to manage their insurance policies and to file and manage their claims quickly and conveniently. New features include a variety of self-services that customers want – car rental reservations, roadside assistance, and selection of desired repair shops.
“State Farm continues its digital presence online with a number of enhancements intended to connect to users in new ways including expanded payment options and digital self-service choices for policies, accounts and insurance claims,” Langcuster said.
Technology improvements also show promise in the area of Workers’ Compensation. Brian Ricketts, director of the Loss Control Department for LUBA Workers’ Comp, which provides coverage in Mississippi and other states, said workers can be provided with different types of wearables that have a radiofrequency emitter similar to the tags used on merchandise in stores to detect theft. Those can be used to keep track of an employee or vehicles.
“You could use a similar tag as a slip detector to find out if an employee fell down or make sure they are not in a dangerous area such as behind a big truck, for example,” Ricketts said. “On the same subject of wearable safety, there is a powered exoskeleton that has a mechanical backpack that allows the workers to bend over and pick things up with a machine instead of their back. That could be particularly helpful with nurses having to lift patients.”
Ricketts said wearables aren’t being used that much yet for a variety of reasons: Cost is always a worry. Another concern is privacy. Putting a device on someone to follow them around on the job is uncharted territory.
Kelli Bondy Troutman, vice president, director of communications and community relations, LUBA Workers’ Comp, said wearables might be used to learn more about workplace hazards. If someone slips, but doesn’t get hurt, that is classified as a near miss.
“If you can track and tune into those, you can take some preventative steps proactively, and help prevent future accidents,” she said.
Troutman said there are some simple, practical devices that have been around that aren’t as exciting and intriguing as a sensor, but are inexpensive and have a proven track record. One is the Alumagear Halo Light, a circular light that fits over a hard hat, produces a ring of light.
“It lights up the work area so they can see and do their job more safely,” she said. “There are hundreds of examples of like that that Workers’ Comp has embraced anything to help work safer. Everyone is on board with that.”
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