Can big data make workers' comp insurance fairer?

Nationwide VP and insurtech CEO on their link up

By David Saric

Aug 02, 2023 Share

Nationwide hopes its team up with big data pay-as-you-go insurtech Hourly will differentiate it and provide an underwriting boost in a crowded workers’ compensation market, Nationwide VP of workers’ compensation programs Dale Hoppe (pictured left) told Insurance Business.

“Working with Hourly in this capacity has really allowed us to stand out amongst our competitors,” Hoppe said. “As we bring new products and new programs to markets, it helps us tap different industry segments that are either underserved, or maybe they’re overserved.”

The workers’ comp space has been competitive for the last decade, with capacity having increased as new entrants take a share of the marketplace. This has pushed insurers to look for capabilities that will allow them to stand out from their peers, according to Hoppe.

Nationwide has bet on Hourly as part of its bid to stand out. Under what the pair have described as an “alliance”, Hourly will act as a managing general underwriter (MGU), working with a network of around 3,000 independent producers.

Coverage in the workers’ comp space is frequently calculated using data that can be between 18 to 24 months old. This can create some uncertainty around costs and coverage needs, particularly for small businesses in areas like trucking and construction who may have employees who are not salaried, according to the insurtech.

“Premiums are estimated, and as we all have seen, contractors ebb and flow relative to jobs, which means we need data that is more relevant to the current job landscape,” Hoppe said.

Hourly uses big data, including real-time data points, to come up with what it has claimed is a fairer assessment.

“What we are particularly drawn to is the idea of a pay as you go model that Hourly has innovated,” Hoppe said.

By bringing in Hourly and its real-time data tracking capabilities, Nationwide hopes to allow for more accurate and cost-effective underwriting.

“Whether a company has reduced or increased its staff, they will be able to access the correct coverage that accounts for how a business is operating in the present,” Hoppe said.

Hourly was initially established as part of a “conscious effort” to streamline payroll for small businesses, according to Hourly co-founder and CEO Tom Sagi (pictured).

The tech is intended as a tool, rather than a replacement for the human touch, Sagi told Insurance Business.

“While we are out here updating the underwriting process for workers’ comp, we never want to replace the underwriter,” he said.

“We still believe in letting a human have the final say and overview of writing a policy,” Sagi said. “What we’re doing right now is building tools to empower the underwriter to really make focus their time on pure underwriting decision and without all the busy work around it.”