HOW TECHNOLOGY IS REIMAGINING WORKERS’ COMPENSATION INSURANCE

PEOs manage about four million worksite employees in the US, and the top 10 insure 60% of the market.
For decades, PEOs have been helping businesses navigate several workers’ compensation challenges, including complex claims processing and developing safety protocols. Yet, as workplace demands and risks evolve, so must the strategies and tools they use to address them.

Workers’ compensation is no longer simply about compliance or settling claims—it’s about proactively protecting and supporting the workforce.

Today, the infusion of technology in workers’ compensation is revolutionizing how PEOs serve their clients. In an industry where speed, accuracy, and a human-centered approach are important, technology keeps PEOs ahead of the competition.

Let’s explore the impact of tech in reshaping workers’ compensation and how PEOs can harness these innovations to improve their services.

ENHANCED RISK ASSESSMENT THROUGH DIGITIZED UNDERWRITING

Traditionally, underwriting was a time-consuming process that was prone to manual errors. The data collection methods were also often outdated. Decisions could take weeks, frustrating the customer and slowing the insurance workflow. Relying on limited historical data and manual calculations also meant risk assessment was inconsistent.

However, the industry has come a long way from manual risk assessment. Advanced machine learning algorithms analyze vast amounts of data instantly to identify risk factors more precisely. This has drastically improved underwriting and pricing accuracy.

Digitized underwriting has also enabled organizations to generate instant quotes for new businesses that need workers’ compensation coverage.

According to a McKinsey report, leading insurers saw retention in profitable segments increase 5 to 10 percent, thanks to digitized underwriting.

FRAUDULENT CLAIM DETECTION

Research by the National Insurance Crime Bureau shows that workers’ comp insurance fraud costs an estimated $30 billion annually in the US.

Data analytics models can help PEOs identify red flags associated with fraud. The tech can identify multiple claims for the same incident or claims with inconsistent information. PEOs can pay close attention to these claims and assess their legitimacy.

PEOs who specialize in helping the trucking industry can use telematics to find out if the accident happened on the job.

Vehicles equipped with telematic sensors send immediate alerts to a PEO when accidents occur. They provide crash data such as time, speed, route, or location. This information can be useful in predicting whether a driver is injured and how bad the injury is, so that they can identify who was at fault.

IMPROVED WORKPLACE SAFETY AND INJURY PREVENTION

Workplace safety is a growing concern for many PEOs. Fortunately, tech can help them combat their concerns and develop strong safety programs. Some notable innovations in this area include:

• Wearable tech that keeps tabs on employees’ real-time physical condition. They alert the employee about bad posture or movements that might result in an injury.
• AI-powered video surveillance that scans hundreds of hours of workplace video to identify potential risks based on patterns it recognizes.
• Predictive analytics models that use past claims and injury data to predict future outcomes. PEOs can use this information to help the business create a safety program

WORKERS’ COMP INSURETECH: A BOON FOR PEOS

In a soft workers’ comp insurance market where the competition is high, PEOs have to be tech-savvy to make a mark in the industry.

PEOs can provide more efficient and accurate services to their clients, reduce costs, and ultimately improve employee experience with the right insuretech solutions. As the industry moves forward, it is clear that technology will play a pivotal role in shaping the future of workers’ compensation.