The next insurtech application breakthrough – Drone

Print

Email

From its initial application in military operations, Drones have evolved to be a powerful business tool being applied in various industries including insurance. The commercial use of Drones in insurance sector has gained significant impetus especially from the Property & Casualty insurers who are widely using the technology for property assessment. Geographically, North America dominates the use of drones for commercial purpose with drone technology deployment for insurance claim settlement being the maximum in the US. The US insurance industry being amongst the earliest to embrace the drone technology for commercial use will play a significant role in fostering the sales of commercial drones which according to the FAA (Federal Aviation Administration) estimates is expected to reach 2.7 million by 2020.

One of the most common applications of drones in the insurance industry has been for roof inspections by certified insurers for claims on catastrophic damage. The technology driven assessment of property damage gives the insurers huge benefits in terms of cost, time and accuracy in comparison to the traditional assessment methods. Where a manual inspection requires at least half a day for detailed assessment, a drone inspection is capable of capturing approximately 350 images of the property in 20 minutes. Through drone technology application, the insurers can also avail data helpful for deriving property measurements, produce elevation maps and three dimensional models, and calculate risk due to wildfire or floods. Some of the notable examples of companies globally who have deployed drones for improve their claim assessment include:

• In the US, drones were seen flying for leading insurers including State Farm, Allstate and Farmers Insurance making assessment of the damages caused due to hurricane Harvey in April 2017. AllState launched the largest use of drones for assessment of property damage in four states including New Mexico, Texas, Colorado and Oklahoma and tested its operational capacity for claim processing.
• Insurance giant QBE used drones for damage assessment of the earthquake in Ecuador. The catastrophe has led to collapse of over 684 private building resulting in physical access restriction in the quake zone by the Ecuadorian authorities. QBE, however, through deployment of drones was able to settle 90% of the large-loss claims within 90 days.
• Traditional insurers are also improving their property damage assessment capabilities by teaming up with insurtech companies such as Betterview which specialize in property inspection through drones. Betterview specializes in drone deployment for offering insurers and reinsurers with basic roof inspection solutions for claim adjustments to specialized solutions such as thermal scans to determine risks to the claimed property due to overheating of electric wiring or trapped moisture.
• AXA, the French global insurer operating in various countries including Switzerland, Mexico, France, Belgium and Turkey expanded the use of drones beyond roof inspection.  The company deploys drones in all the places and areas which are risky for humans like a place suspected with chemical toxicity and fire damaged buildings. The company is also creating more efficiency in handling claim adjustments by developing platforms and tools to create data sources from the drone images.
• Country Financial, an US insurer, is using drones for agricultural insurance claims. The crop claim adjusters are able scout three times more acres using drones compared to physical scouting by an adjuster. Through this technology, the farmers are also able to get more information to choose the coverage for their crop insurance.

The extensive use of drones for commercial purpose has also created an opportunity for insurers in form of a new insurance product relating to drone insurance. According to TechInsight360 estimates, the global sales of drones are expected to grow to over $15 billion by 2021.