Role of The Drones Technology For Insurance Industry

The insurance industry has changed over the last decade as a result of the adoption and application of newer and better technologies. Interestingly, drone technology is part of this revolution as it has found many good uses in the insurance industry. For instance, a popular Goldman Sachs drone report puts the worth of the insurance claims market at $1.4 billion.The sheer amount of data the industry obtains with the help of drones is amazing as they would be impossible to obtain ten years ago. Today’s drones have many sophisticated features that anyone can easily obtain maximum utility from.

Cinematographers and a whole lot of others have already adopted them in the movie industry. Insurers, however, are late to the party as there was a lot of skepticism about how effective these UAVs would be. But then, sleek, smart drones especially the ones from giants such as DJI, Yuneec, and 3DR, have – to a huge extent – put their fears at bay. Here are some of these benefits we talk about.

Drones Make the Claims Process Simpler

David Pitman, CEO of Converge was one of the first persons to realize that the insurance industry would be a very viable ground for drone technology. To experiment this, he flew a drone in New Zealand with insurance in mind – the first man to do that. Gone are the days when claims were a very rough estimate of the actual damage and often far-fetched from the truth. Before drones came mainstream, a claim adjuster often arrives the site of the damage with all sorts of tools; a ladder, tape, climbing boots and more. Many times, the process involved dangerous ascents to rooftops, broken balconies and other equally dangerous spots. This could take anything from a couple of minutes to several hours or even days. But all of these have changed quite dramatically.

Today, a claim adjuster still needs his tools, though. But most importantly, a good camera drone eliminates plenty risks on the side of the adjuster. By setting up the drone and having it carry out a programmed flight around specific areas within the damaged property while taking high-quality photos and clear footage. Many industry experts have shown appreciation for this development saying it would double the efficiency of claim adjusters while making their job safer.

More Reliable Assessment of Risks Before Pricing

As long as selling insurance policy is concerned, effective pricing remains very important to insurers.In previous times, a property had to be assessed from just one point of view before policy pricing is settled. Often times, this leads to a wrong spatial analysis and consequential poor pricing – either the insurersundersell their services or policyholders get to pay too much in premiums. When drones are used to assess a given property, the spatial analysis is done way better. Factors that predispose the property to damage, as well as the ones which reduce the risk of damage, are more easily identified and taken into consideration.

This is what insurance is all about and these Unmanned Aerial Vehicles (UAVs) are making risk management less difficult. Both the given company and the potential customer benefit from this significantly. For instance, the insurance broker would have a video footage of a client’s property with which will help explain to the customer how the risks were analyzed to arrive at the given price.

Faster Catastrophe Model Development

For Parker Beauchamp, CEO of INGUARD, an insurance company that specializes in risk management for small niches, the drone is a savior. In his HuffPost article, he made it clear that drones are a starting point in catastrophe model development.

Taking rooftop images and videos after a disaster is not all that is required to come up with a catastrophe model quickly. Drones take a number of higher quality pictures in a shorter timeframe than humans would manually be able to do. This makes it easier for the claim adjuster to get quick inputs for spatial analysis – an advantage both for the policyholder and the insurer. It is perhaps important to note that some of these drones have substantive levels of Artificial Intelligence (AI). This means some of them can avoid obstacles, fly various kinds of autonomic modes and easily return to the pilot in the case of any difficulties or break in transmission.

Reduced Losses from Fraudulent Claims

It is a common practice for placeholders to inflate claims following a disaster, in the hopes of getting the highest possible indemnity from their insurers. In fact, the Insurance Information Institute claims that 1 out of every 10 claims they indemnify are fraudulent. Small as this percentage may seem, the insurance industry loses billions of dollars to these claims every year. And from what insurers all over the country say, there is no chance that this is going to stop anytime soon.

To reduce these losses, drone technology is being currently utilized. While a policyholder can include damages to his property before great disaster strikes, the insurer can very easily tell whether these claims are true or not by employing aerial surveillance by UAVs as they can often navigate even extremely narrow corners that humans would otherwise be unable to maneuver.

Risks Associated with the Use of Drones

First, the Federal Aviation Authority (FAA) recommends that drones which weigh over 0.55 pounds and less than 55 pounds be registered. The pilot must be at least 13 years old and the drone must not fly higher than 400 feet above the ground. Violating any of these rules and some others could lead to problems with the government.

Again, should the drone invade the privacy of other individuals or perhaps, malfunction and fall on them or their property, causing damages, they could press charges against the insurer. While it will be difficult for the claimant to prove that the insurer’s drone invaded their privacy, it does not absolve insurers from the likelihood of getting charged and prosecuted for third-party offenses.

Final Thoughts

Drones are gradually penetrating any and every industry in the world today. For instance, they are used to observe wildlife, monitor crops, deliver supplies in cases of health emergencies, and they are even finding their way into sports. For the insurer, the occupational risks UAVs eliminate in on-site property damage evaluation cannot be overemphasized. The ease of obtaining data for spatial analysis using drones, as well as the speed of the whole process has become a lot more impressive in recent times. Embracing drone technology in the insurance industry seems to be a great step in a good direction, and insurers who wait for too long before adopting the use of UAVs may not be making the best choice.

Author Profile: Prasad Dusane is a drone geek who blogs at dronesdevil.com and has recently published this interesting article Drones Buying Guide for Beginners.

Image by pixel2013 pixabay

 

Prasad Dusane

Prasad Dusane is a drone geek who blogs at dronesdevil.com

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