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More and more, employers are looking at how wearable technology can be implemented in the workplace, with improving employee safety as a primary goal. Devices can allow companies to monitor and track activities, analyze motions, alert for hazards, and augment physical capabilities, among other things.

Workers compensation has experienced a long-term decline in overall claim frequency, with a 19% decrease from Accident Year 2011 to Accident Year 2016. Among other causes, NCCI research points to automation, robotics, and continued advances in safety as contributing factors to the decrease. However, during this same time period, total claim severity increased 13%.

When it comes to workers compensation, wearables are in their infancy. While wearables are being tested today by insurance companies, as well as other employers and their workers, the technology and its potential is primarily in the proof-of-concept phase.

Companies are expressing interest in exploring uses for wearables as advances are made, yet only a handful of companies have piloted the technology to date, according to the stakeholders NCCI interviewed. Similarly, while some larger employers are piloting wearables, the actual use among employers overall appears limited so far.

Primary stakeholders in the implementation process for wearables include insurance companies, agents, policyholders/employers (including risk managers and human resources personnel), employees, and wearables vendors that provide the technology and can partner with insurance companies and employers on proof-of-concept/pilot projects.

Wearable technology, as it relates to workers compensation, ranges from measuring an employee’s physical activity, posture, or location to measuring multiple workplace conditions such as movement, light, humidity, temperature, and other environmental conditions. Some wearables can pair the data collected with third-party data—such as data about weather conditions—to provide a more complete picture of the working environment and associated risks.

In addition to preventing injuries, wearable devices could assist injured workers returning to work and help keep them there once they return. In a compelling example of how wearables can be used in workers compensation return-to-work scenarios, a first responder who suffered a spinal cord injury in the line of duty was fitted with an exoskeleton. The individual was able to return to work as a police officer six months after he was injured.

In terms of affordability, as with any new product, wearable costs are expected to decrease over time as new companies and products enter the marketplace. However, employers may have concerns about investing in wearable devices if they have short lifespans as next-generation technology and/or newer versions of the wearable devices become readily available.

The stakeholders NCCI spoke with believe that wearable technology has the potential to be a game-changer for workers compensation. One stakeholder indicated a 30% to 50% reduction in back-related injuries during the proof-of-concept stage and the potential for more reductions in injuries and claim costs as wearable technology improves and becomes more widely used.

As wearable technology advances, the interviewed stakeholders agree that wearables are well positioned to become an integral part of the future workplace and the workers compensation system. Notably, with more widespread use, wearables could provide data and information that could lead to safer workplaces and may help reduce recovery times, facilitate return-to-work, and reduce the overall costs of workers compensation claims.