The Hartford’s New Innovation Lab Reflects Insurance Industry’s Embrace of Insurtech
By: Sean Teehan, The Hartford | Posted: 9/8/2021
Equipped with a scribbled-on whiteboard, small putting green and a sign that says “Think Big,” the Innovation Lab at the top floor of The Hartford’s Asylum Avenue headquarters evokes a respite from the buttoned-down insurance company feel.
Casual atmosphere aside, the 14 staffers who work in the two-year-old innovation lab play the increasingly important role of figuring out how The Hartford can deploy new technology to prevent losses for commercial clients from things like water damage and worksite accidents, and generate data to adjust insurance products the company offers.
It’s already showing signs of progress. For example, the lab spent a year experimenting with sensor technology that detects leaks in a building’s piping system before they result in water damage.
The Hartford — which employs over 6,000 people in Connecticut and generated $20.5 billion in revenue in 2020 — is now gearing up to deploy those sensors in thousands of customers’ buildings, said Dan Campany, The Hartford’s vice president of innovation and head of IoT (Internet of Things).
“Our experiment process is kind of the primary component of what we consider is the lab’s purpose,” Campany said.
While The Hartford has long conducted insurance-related research — it opened its Industrial Hygiene Laboratory in 1968 — establishing an innovation lab largely focused on IoT technology marks the 211-year-old insurer’s embrace of insurance technology, or insurtech, which many predict will transform one of the Hartford region’s most important industries.
The insurtech sector is already booming with activity. According to market research firm CB Insights, insurtech companies raised $7.4 billion during the first half of 2021, more than the $7.1 billion raised in all of 2020. In recent years, Hartford has made efforts to attract insurtech companies to the city, while local insurers have created in-house insurtech products, or adopted technologies from startups.
Travelers, for example, last year bought InsuraMatch, which helps individuals compare plans from more than 40 carriers nationwide. The company also partnered with South African insurtech startup Pineapple to create a mobile app through which customers can buy insurance for valuables that aren’t traditionally covered.
Return on investment
Unlike companies such as specialty insurer Hartford Steam Boiler — which has long developed its own in-house products that use sensor technology to prevent things like pipe bursts — The Hartford’s innovation lab doesn’t try to create new technologies, but works on solving problems using existing IoT devices, Campany said.
“Let’s say we get a new idea from an underwriter, ‘we’re seeing a lot of these types of losses, can someone do something to help us mitigate these losses?’" Campany said. “We’ll come up here and we’ll get together and say ... let’s figure out what technology we have that could solve the problem, and let’s figure out what the design of the experiment and the hypotheses need to be.”
Key questions they have to answer include what technologies exist to solve the problem, whether companies would actually embrace them and could they work at scale?
Once they develop a solution they’ll test the technology on a small number of customers.
Researchers at The Hartford have equipped about 300 companies of all sizes with sensor technologies, including a system capable of measuring water pressure throughout a skyscraper, and a hockey-puck sized sensor that detects water leaks in specific areas of a building.
Water leak sensors will soon be rolled out to thousands of The Hartford’s customers. The hope is that the investment to research, install and use the sensors will yield greater future savings from fewer claims.
Additionally, sometimes IoT technology deployed via the Innovation Lab provides The Hartford with information they weren’t expecting.
For example, when a manufacturer agreed to equip employees with vests that measure posture and movements, they found workers were bending deep enough to risk back injury, Campany said. Using this data, they determined the carts being used to transport materials across the floor were too short. They started using taller carts, which could prevent future workers’ compensation claims, Campany said.
The Innovation Lab isn’t the only place where The Hartford is using technology to look at building and workplace safety.
The company opened new lab space for its long-standing Industrial Hygiene Laboratory toward the end of 2019, said lab manager Bob Ross. The space was designed to hold new technology that can measure whether floors present a slip-and-fall risk, if air particles in a workplace could threaten worker health, and a plethora of other workplace safety concerns.
“IoT’s great, and we have sensors to do that,” Ross said. “But a lot of times there are also exposures that last all day.”
Recently, while doing routine air quality testing at a manufacturing company, Ross said samples analyzed at The Hartford’s lab showed the presence of beryllium, a metal that’s toxic to humans. After looking for possible causes, they found a sander the company was using on-site was creating the contamination.
Since 1975, the lab has maintained ISO 17025 accreditation, a sort of industry stamp of approval for testing and calibration laboratories, Ross said. And operating in a space designed for growth, Ross said The Hartford is in a position to remain at the cutting edge of workplace safety for the foreseeable future.
“We didn’t want to design a lab for 2019, 2020,” Ross said. “We wanted to build a lab for the next 46 years.”