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PROPERTY & CASUALTY
AUG 23, 2017
How Are Drones Impacting the Insurance Industry?
Drones – unmanned aerial vehicles that are piloted using a remote control or a computer – have been dubbed the next “disruptive technology.” The Federal Aviation Administration (FAA) has already issued over 770,000 drone authorizations for commercial use in the first 18 months since the registry first began. They’re already being tested for package delivery by UPS and Amazon – and Oscar Mayer even has an official WeinerDrone to potentially deliver their product to remote areas.
How Drones are Being Used
Package delivery isn’t the only way drones are being used. The construction, energy, agriculture and entertainment industries – as well as insurance – are finding a myriad of applications for drone use. In insurance, there are several flight definitions of what can be accomplished with drones:
2-D Ortho-mosaic Deliverable
–general inspections, logistics, planning, etc.
3-D Ortho-mosaic Point Cloud Deliverable
– 3-D site images from varying angles
3-D Mapping and Modeling
– geographic site definition, site planning, etc.
3-D Mapping, Volumetric
– identify and measure volumetric cut and fill amounts
– close inspection documentation, hard-to-reach inspections, etc.
The Association for Unmanned Vehicle Systems International (AUVSI) projects drones to have a $13.6 billion economic impact in the next three years and $82.1 billion by 2025. The AUVSI also predicts drones will add 70,000 new jobs in the first three years; and an international trade group forecasts 50,000 new direct jobs by 2025. For the insurance industry, drones could help reduce operational costs and improve loss control and risk management accuracy.
The Future of Drones
While the future of drone technology seems bright, there are a few hurdles on the horizon. There are two bills circulating Washington: the Drone Federalism Act, which would preserve state rights to regulate drone activity; and the Drone Innovation Act, which is similar, but would allow states to regulate drone takeoffs and landings up to 200 feet in altitude. On the surface, these bills seem benign. But there could be an impending headache for the FAA as well as interstate commercial drone operators needing to adhere to different laws in different states. Moreover, the liability exposure resulting from drone use is excluded from most insurance policies, and needs to be covered separately by way of specialized policy or rider.
Amerisure Insurance is completing a drone pilot program with a handful of select agencies to evaluate the full potential of this newer commercial technology. The pilot program includes general drone flights for infrastructure inspections, volumetric flights and general site mapping such as property surveys. All signs point towards drones having a significantly positive impact on Amerisure’s Underwriting, Loss Control and Claims departments – in addition to its valued agency partners and policyholders.