Workers compensation insurers are increasingly turning to mobile device applications and other technology innovations in their bid to remain a force in the industry and serve their clients, Novarica determined in a new report.
Their hope, Novarica said, is that these high-tech bells and whistles will help them reduce losses and boost returns in what remains a highly competitive sector.
“A significant use of specialized components is to improve the productivity of loss control representatives and consultants, both via mobile device and collaborations via software solutions,” Novarica concluded in its report, dubbed “Business and Technology Trends: Workers’ Compensation.”
“Emerging technologies are allowing advanced insurers to encourage client behavior that will reduce and prevent loss,” Novarica said.
At the same time, Novarica said, workers compensation insurers are still relying on some familiar technological tools.
“Agent portals continue to be important for guiding producers as to carriers’ risk appetite and for ease of doing business generally,” Novarica said. “Replacing core systems to support new product development and improve the consistency and quality of underwriting decisions is also common. Insurers are investing in claims administration systems to improve operational effectiveness and the quality of the claims service, which is a key interaction with a policyholder.”
Beyond those elements, however, new technology and approaches are invading daily workers compensation underwriting routines. How is this happening? Here are some of Novarica’s major findings:
- Mobile devices are getting bigger in the workers compensation space. Novarica said that most mobile apps in this area are focused on loss control, and third party administrators are using apps that handle injury reporting and other claims self-service functions.
- As insurers increasingly use third party and multidimensional data in their workers compensation analyses, they’re spending more on proactive analytics to figure out which claims will produce long-term payouts.
- Agent portals, business intelligence and core claims/policy administration systems place at the top of workers compensation technology initiatives.
- Insurers are also focusing on improving their technology for billing, customer portals, distribution management, document creation and management, rating, underwriting workstations and specialized elements.
- Pay as you go policies, where businesses pay a premium every payroll period versus an annual premium, are becoming more commonplace, helping to simplify how coverage is sold and handled.
These workers compensation changes come as the combined ratio for private carrier workers compensation hit 101 in 2013, according to A.M. Best data cited by Novarica, versus 115 in 2011 and 108 in 2012. Favorable loss experience contributed to most of the gains, Novarica said.