Construction Tech, Insuretech, Risktech
To meet the challenge of stagnant productivity in the construction industry, nearly 500 technology companies have started since 2009. Most of them seek to increase efficiency on the construction site through better planning, communication, logistics and collaboration.
During the same period the insurance industry has also seen the development of startup technologies. “Insuretech” companies are using technology for underwriting and information gathering.
Now, as detailed in an article in Insurance Journal by Martha Notaras of venture capital fund XL Innovate (online at https://www.insurancejouranl.com/magazines/mag-ideaexchange/2018/11/19/509377.htm) construction and insurance tech startups are combining to mitigate worker injury and property damage at construction sites. There is much to do: every year there are $11 billion in construction site losses and almost 1,000 deaths – one fifth of all worker deaths in the United States.
“Risktech” companies focus on worker safety, asset protection and lessening project risks across the board.They can sell their services to both contractors and insurers. The biggest risks are fire (over 8,400 per year, many arson related), water damage and workplace fatalities. Until now construction risk management has focused on risk transfer – indemnification and insurance requirements. Both contractors and insurers benefit by emphasizing risk reduction over transfer.
Some examples of how technology can reduce construction risks:
- Real time analysis of environmental conditions.
- IoT devices to sense water leaks and burst pipes.
- Drones to inspect construction sites and deter theft and vandalism.
- Wearables to monitor workers.
- Site sensors to monitor job sites for hazards.
As of 2017, 38% of contractors were using drones but only 9% used wearables and 7% jobsite sensors. If you’re a contractor who uses technology for loss control, tell your broker and insurer; it may lower your rates. If you don’t, ask your insurer’s loss control department for suggestions on how and where to start.