Using safety data analytics to reduce work injury insurance costs

Introduction

Every year more than 1.1 million people die from occupational accidents or work-related diseases in Asia and the Pacific¹. Occupational accidents and diseases have an impact not only on the lives of individual workers but also on the productivity and profitability of the companies who employ them.

Now that countries are starting to relax their COVID restrictions and worksites are opening up across Asia, the number of work related fatalities and serious injuries have been creeping up². An increase in wages, medical expenses, and other cost components across the region are also likely to have an inflationary impact on work injury insurance premiums.

What is safety data analytics?

Put simply, Safety Data Analytics (SDA) is the recording and tracking of pertinent data relating to key aspects of workplace accidents and injuries. A key aspect of SDA is that it incorporates both historical (lag) indicators and forecasting (lead) indicators of safety performance within an organization.

Historical Indicators of Safety Performance measure a company’s work accident and injury performance in terms of past statistics. They measure the occurrence and frequency of past events and can alert companies to a failure in an area of a safety and health program or the existence of a safety hazard³. Whilst most safety and health professionals are familiar with these historical indicators of safety, the indicators still fulfill an important function if used effectively, in reducing work injury costs and fulfilling employer’s due diligence responsibility in providing a safety place of work for their employees.

They do this by answering the basic safety data reporting questions relating to the ‘what, when, where, who, why and how,’ of workplace accidents, as well as reporting on the frequency, severity and type of workplace accidents and subsequent injuries.

In relation to historical reporting criteria, the following distinctions should be noted:

The ‘type’ or category of accident (e.g. slips/trips/falls) should not be recorded as the ‘cause’ of an accident. For example, in terms of slips/trips/falls, there may be a broad number of possible causes that need to be identified in order to prevent future accidents. These causes may include floor cleaning in progress, spilt liquids, leaking pipes, rain, trip hazards, use of escalators or moving walkways, etc.
Frequency count and frequency rates should both be recorded. A total frequency count over a given time frame or in relation to specific locations, departments or job titles is beneficial in the effective targeting of safety management resources and the development of effective control measures where they are most needed. However, frequency rates per staffing levels or hours worked, allow for a comparison of accident frequency across difference sized workforces (e.g. before, during and after COVID-19), and frequency benchmarking between departments, locations and companies within similar industries.
Locations of occurrence should reflect the different geographies and addresses at which the business operations, as well as internal sub-locations within each plant or property where high frequency accidents are being reported.
Severity in terms of insurance costs should quantify and track the costs of workplace accidents from the time of occurrence through to when the claim is closed. Severity costs may be tracked in terms of separate medical, indemnity (lost time), permanent injury, litigation, administrative, total reserve and total costs incurred.

Loss Forecasting of Safety Performance is a commonly used statistical technique that can predict future behavior and from a safety performance perspective, considers what is likely to happen if current work accident and injury trends continue. Loss forecasting solutions work by analyzing historical and current data to generate a model to help predict future outcomes and are a useful tool to assist in forecasting the impact of future accidents in the workplace.

Download our PDF for more information about how to project future work injury losses that may be expected by a company and assess the value of the company’s existing work injury insurance program in terms of its effectiveness as a means of work injury risk transfer.

References

¹ Safety and health at work in Asia and the Pacific, International Labor Organization (ILO).

² Alarming Rise in Workplace Accidents in Asia as Covid Restrictions Ease, Kee Safety Singapore, 4^th May 2021.

³ Using Lead Indicators to Improve Safety & Health Outcomes, Occupational Safety & Health Administration (OSHA).

Disclaimer

Willis Towers Watson is an insurance broker and gives its views on the meaning or interpretation of insurance policy wordings as brokers experienced in the insurance market. Insurers may take a different view on the meaning of policy wordings. Any interpretation or thoughts given are not legal advice, and they should not be interpreted or relied upon as such. Should a legal interpretation of an insurance contract be required, please seek your own advice from a suitably qualified lawyer in the relevant jurisdiction. While all reasonable skill and care has been taken in preparation of this document it should not be construed or relied upon as a substitute for specific advice on your insurance needs. No warranty or liability is accepted by Willis Towers Watson, their shareholders, directors, employees, other affiliated entities for any statement, error or omission.

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Author

Vincent Mossfield

ISO 14001 Auditor and Regional
Director Liability Risk Practice, Asia

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