6 Benefits Of Using Drones In Insurance
Insurance industry estimates show that global spending on drones is expected to top $100 billion over the next decade. Echoing the same, in a recent report, Novarica concluded that insurers are adopting drone technology rapidly across insurance life cycles. 16% of P&C carriers plan to or are actively driving drone initiatives. According to PwC, drones are the future of claims adjustment.
Drone technology can speed up claims processing, property appraisals, and provide a more systematic and accurate data collection, which benefits both the insurance companies and their clients. In the wake of the 2018 natural disasters, the significance of drones and aerial imagery skyrocketed to a new level with insurers making them an integral part of their disaster recovery procedures, particularly in the wake of hurricanes in the Southeast and wildfires in the west.
Insurance giants like Allstate partnered with a drone tech company to improve and streamline property claims, resulting in cycle time improvements of 30 to 40% and a 50 to 60% increase in adjuster productivity. Another insurance heavyweight, Travelers, is the largest commercial drone user in the U.S., especially when it comes to roof damage inspections, which is one of the most common claims made after a hurricane or big storm. Drones can complete insurance inspection in as little as 20-30 minutes. Even on the regulatory front, there have been encouraging signs of growth for the use of commercial drones. The FAA has issued the first national waiver ever to State Farm for drone operations over people and BVLOS (beyond visual line of sight) to conduct these types of operations for damage assessment throughout the U.S. for an extended period.
Savings- The real estate, insurance, and property management markets add up to at least $750 billion in transactions. Using drones for inspections should save property owners hundreds of millions of dollars in repair and maintenance costs alone. Below-the-surface issues that otherwise cannot be identified like water damage can now be addressed. Moreover, the entire process can be completed in minutes instead of the hours or days associated with manual inspection. To put things in perspective- a traditional inspector, would take over an hour for the inspection and charge 2-3 times more than a professional drone services company like DroneBase's guaranteed payout of $70 per inspection.
Data and Analysis- Drones can give adjustors a far greater set of data, which can then be used throughout the claims process. Cloud technology enables a secure channel of information between ground teams, the home office, and outside stakeholders like contractors. Using DroneDeploy's mobile flight app, you can quickly plan an automated drone flight and capture high-resolution roof imagery in as little as 10 minutes with an accuracy margin of 99.4%. Insurance companies will undoubtedly begin to leverage drones as a tool for damage prevention by automating labor-intensive tasks and other tedious structural assessments.
Safety and Accessibility- Drones give insurance adjusters the access they need without compromising their safety by reducing the need to navigate rugged terrain or scale rooftops. Notably, in the immediate aftermath of a storm, fire, or other disaster, drone maps offer a complete aerial view of the area and allow claims adjusters to analyze the cause of the loss better. This leads to faster turnaround time and improved efficiency to the tune of 40% to 50%, as deduced by Cognizant. Insurers like Liberty Mutual and Travelers have started using drones to do birds-eye-view inspections of the rooftops to damaged homes.
Disaster Management- Drones are not only faster, safer, and more accessible than ground inspections, giving insurance companies an efficient way of documenting the site as it is to assess the damage. Drones can cover large or inaccessible areas without compromising on safety and accuracy, making the claims adjustment process that much smoother and faster. For the insurers and people impacted, timing is everything. The most significant benefits to the insurance industry may come in the ability to fly drones beyond the visual line of sight (BVLOS). Chubb deployed internal drone operators for claims assistance in flood-affected neighborhoods. IBM's AI system, Watson, can automatically process aerial imagery, assess hail damage, and calculate damage extent.
Insurance for the Insurer- The high degree of accuracy that drone maps provide helps insurance companies decline a claim if they are not responsible. As seen during the 2018 lava flows in the Leilani Estates neighborhood in Hawaii, insurance teams were able to identify how many homes and, more importantly, which ones were affected by the lava flow. They estimated an additional cost savings of 20% on claims adjustment had they been able to use BVLOS drone-based data collection. The Kespry solution helps prevent losses and informs underwriting decisions with incredibly high resolution aerial and thermal imagery that can be used for risk assessments.
Loss assessment- Drones are rapidly being adopted for loss assessment in the insurance industry. Before issuing a new insurance policy, drones can be used to collect information about a property by capturing data on property features that make it less vulnerable, such as storm shutters. This can facilitate personalized premiums. According to Verisk, in the automotive industry, insurers lose at least $29 billion annually in premium leakage. Drones, powered with location-based services, can help insurers collect accurate data and patch up those leaks. Allstate insurance company is among the very first companies to employ the use of drones. The company conducts random inspections of vehicles and other insurable risks, thus saving time and resources.