Insurance Takes to the Skies: Drones in Insurance

Tuesday 10:24 am: An insurance claim for property damage is made.

Tuesday 10:25 am: A drone is immediately dispatched to visually verify the claim details. 

Tuesday 2:13 pm: The claim is finalised - at low cost and with minimal risk. 

Fact: Drones offer the opportunity to genuinely transform the industry. 

When most people think about drones they probably think of footage of action sports or sweeping bird’s eye views of all the places you’d rather be (do yourself a favour and check out this video of 2018’s best drone footage). 

But drones are increasingly becoming integral to the commercial space too. They are now widely used for everything from construction site management, to monitoring crops, fire fighting, and in search and rescue operations. 

One of their most important commercial uses is in the insurance industry. Their diverse set of capabilities and advantages for insurance use are unmatched by any other technology. And these potential uses span both the pre and post-loss insurance value chain. 

So… Why Is Everyone Talking About Drones?

Drones are essentially just aircraft without human pilots onboard. They can be made to almost any size and remotely controlled by humans or can fly autonomously thanks to a range of sensors and GPS based software. 

They can also be equipped with all sorts of ultra cool high-tech gadgets including;

• Visible light and infrared cameras
• Weather and environmental sensors
• Laser radar systems
• License plate readers

The use of drones in insurance is game-changing. They offer ways of collecting important data for the insurance industry that has traditionally been either extremely high cost or in some cases impossible to obtain. Their lack of human pilots means they also provide a safe method for assessing high-risk sites such as disaster areas, fire zones, contaminated sites, or very remote locations.

Perfect For Insurance

The insurance sector is at the forefront of commercial applications for drones because they meet three vital strategic objectives - expanded data acquisition, improved risk management, and lower operational costs. 

So what are some of the possible applications of drones in your organisation?

Pre-loss

• Aerial site assessments - use of high-quality imagery to identify property features. This enables property owners to seek a reduced risk profile or take action to lower risk to obtain discounted premiums.
• Natural disaster response and monitoring - drones can be safely and rapidly deployed to observe areas threatened by natural disasters. 

Post-loss

• Inspections - drones provide faster, safer, and lower cost ways to inspect sites especially in remote or challenging locations. They are ideally suited to assess incidents such as roof damage. 
• Claims adjudication - as soon as a property claim is made, drones can be deployed to inspect the claims site. This increases the timeliness and accuracy of information capture, improving the quality of the claims adjudication process. 
• Fraud prevention - drones can be a vital tool for obtaining visual imagery and data to investigate and prevent fraudulent claims. 

Risky Business

With their numerous advantages (and some seriously cool features), it seems drone use will only continue to expand in the insurance industry as well as other commercial sectors. 

However, their use is not entirely without some potential risks of their own...

There remain ongoing concerns regarding potential privacy violations. Courts have been known to uphold claims of trespassing involving aircraft operating at low levels that interfere with a property owner. 

There are also safety concerns surrounding drone use whether under direct human control or autonomous operation. Let’s face it, no matter how small a drone is, if it falls out of the sky and crashes into someone it’s going to cause a serious injury. 

Interference is another potential concern with the radio and Wi-Fi signals that drones use to operate and transmit data. This could be due to non-intentional frequency interference from the use of other technologies in the area, or from intentional hacking attempts to deliberately disrupt flights or steal data. 

Therefore insurers need to be very clear about the regulations that apply to drone operation in their jurisdiction including in what locations and at what elevations they are legally allowed to operate. In Australia, these are governed by the Civil Aviation Safety Authority (CASA), which regulates both the recreational and commercial use of drones. For commercial use, this requires both licensing and certification to be obtained. 

Sky’s The Limit

Drones are enabling insurers to be more responsive, accurate, and insightful. And their use has the potential to save the industry many billions of dollars each year through better risk and claims management as well as by reducing fraud. 

Many leading insurers are already utilising drones to great competitive advantage. Do you want to be left behind or start making use of these great tech tools? 

If you are looking to take your career to the sky’s, talk to Ensure to see how we can help you get lift off.