Contractors, Insurers Expect IoT Tech to Improve Construction Risk Management
- January 15, 2021
- Posted by: Alan Hageman
- Category: News
A new study released by Dodge Data & Analytics, in partnership with Triax Technologies, a leading provider of technology for the connected job site, finds that while contractors continue to struggle with construction site risks, they recognize the benefits of using IoT to mitigate them. According to the report, Using Technology to Improve Risk Management in Construction SmartMarket Insight, nearly three-quarters of respondents believe IoT will help them control occupational risks, and about half expect it to reduce risks to the public, as well as financial risks and those related to property damage and construction defects.
The study found that the top motivator for adopting IoT technology is the possibility of lowering insurance premiums (67 percent), followed by recovering lost time due to incidents and winning more work because of a strong safety record.
“These findings are encouraging and confirm what we’ve suspected: that contractors and insurers alike see the value in leveraging IoT technologies to help collect, analyze and act on risk management data,” said Pete Schermerhorn, President and CEO, Triax Technologies.
“Contractors are often a skeptical audience, keeping a close eye on the bottom line,” says Steve Jones, Senior Director of Industry Insights Research at Dodge Data & Analytics. “But when they see something that will improve their projects and their profitability, they embrace it. Their enthusiasm for IoT technologies suggests that we may see the project job site become much smarter in the next few years.”
Respondents report that they are actively collecting key data, and more importantly, using the insights to further their safety and risk practices. More than half of the participants report that they digitally gather (54 percent) or analyze data (59 percent), while 77 percent report that they act upon key safety and risk insights.
However, the study revealed budgetary challenges to tech adoption. Only 10 percent of contractors report a dedicated innovation budget and when it comes to funding new risk-reducing technologies, most contractors either plan to absorb the costs in anticipation of long-term gains (44 percent) or pass on the costs (32 percent).
“These findings highlight an important opportunity to shift the industry towards reliance on objective, empirical data,” said Schermerhorn. “The ability to measure risk is fundamental to managing it, especially in the fast-moving construction environment. It’s essential that contractors dedicate budget and resources to unlock actionable safety and risk insights that can drive improvement in these areas.”
As part of the study, in-depth interviews were conducted with insurers, who agreed that real-time site monitoring can have a high level of potential for reducing risk onsite but that reductions to contractors’ premiums based on technology adoption are unlikely until there is enough actuarial data on the impact of those technologies. However, instituting a cost-sharing program with clients for specific technologies was raised as a possibility, as well as potential savings that contractors could realize from reduced deductible costs and fewer claims.
Download the full SmartMarket Insight for free at www.triaxtec.com/riskreport.