Canadian Underwriter
Feature

Taking Flight


March 15, 2019   by Kabir Shaal, Co-founder, VP of Client Services, Drone Software Canada Inc.


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For insurers, using drone tech is a positive way to increase employee safety, reduce cycle times in the claims process, decrease costs, delight customers and, ultimately, improve their combined ratio.

Being relatively new, however, the technology requires clear thinking to fit within a carrier’s underwriting evaluations, claims processes, fraud detection schemes, and more. The challenge is how best to integrate the technology into existing processes.

To get people thinking about the topic, here are my Top 3 considerations for achieving success with drones:

1. Technology
2. Deployment models
3. Measuring results

Technology

Getting the drone tech right is paramount, or else the entire effort is wasted. Recent advances in artificial technology (AI) and deep learning, for example, offer automated methods of capturing property data and identifying property damage. An automated inspection solution optimal for insurance can be purchased for as little as $3,500 plus an annual software subscription. Solutions such as these are fully tailored to meet insurance needs and are designed to improve cycle times and policyholder experience first and foremost.

 

Things to look for:
• Semi- or fully-automated flight
capability (this leads to flight
efficiency)
• Built-in flight planning (assists with Transport Canada requirements)
• Built-in job assignment (resulting in job efficiency)
• High resolution imagery
• Automatic and ad hoc measurement tools (you may, for example, wish to do more than simply measure
the roof or check gradients)
• Automatic damage detection
(so you don’t have to spend hours
inspecting each image)
• Data export (resulting in easy
integration or compatibility with
leading CAD and estimating software)
• Accuracy (expect 95% to 100%
accuracy in measurements)

Of the dozens of drone solutions available for different industries, only a small handful focus solely on the needs of property and casualty insurance carriers. Fewer still focus on Canada, and even fewer than that have a verifiable track record and are proven to work for insurance inspections.

Deployment models

Fitting an unmanned aerial vehicle (UAV) solution into an insurance company workflow will require the engagement of people; a toggle-switch approach won’t work. A blended approach is recommended.

Things to look for:
a. Complete training programs (Don’t expect to handle this in-house right away)
b. 100% compliance with Transport Canada and Nav Canada requirements and regulations (safety is always a priority)
c. Tech support throughout all phases of implementation

Broadly, there are two deployment models to consider:

A. In-house model
This model includes a couple of options:
1. Equip existing field adjusters with drone tech
2. Use a dedicated, specialized team of qualified pilots to inspect and provide data for desk adjusters.

Developing your own dedicated drone program is an investment that will yield tremendous benefits over time, particularly when it comes to reducing your transactional costs. The specifics of any drone program can vary significantly depending on your vendor selection, hardware, and so forth; hence the need to make the right tech choice in the first place. Figure 1 shows some benefits and drawbacks of the in-house drone model.

B. Outsourced model
Outsourcing the work to drone pilots who can capture claims data will give you an immediate return. It’s a great option when you need to scale up field or desk adjustment labour. For benefits and drawbacks to the outsourced drone model, see Figure 2.
There is a third option, which is to do both: use in-house capabilities during periods of business as usual and outsource the work during peak events using flexible contract pilots-for-hire to fill in gaps. This blended solution is often an ideal balance in volatile claims environments.

Measuring results
In the end, the only thing that matters is whether drone use positively affects the business. Insurers require specific data to help them manage risk and indemnity efficiently; data acquisition and exploitation must be efficient and meaningful. For these reasons, a drone solution is predicated not on the type of drone but on the software that drives it. Ideally, the software should be multi-purpose: it should serve both underwriting and claims functions, thereby improving not only the loss ratio but the underwriting result, too. Ultimately, it should benefit the combined ratio.

Things to look for:
a. High accuracy (check for proof that measurements and damage detection are very accurate – higher than 90% accuracy is a good starting point)
b. Speed (reports should be available within 24 hours; the sooner within that timeframe, the better)
c. Better claims and underwriting results (ask your UAV partner for proof – case studies will help)

Overall, a UAV solution has to offer a combination of low cost, high impact, easy deployment, and high accuracy. Anything less is a step backwards.

Kabir Shaal has an Associateship of the Chartered Insurance Institute (ACII) designation, an MBA (Systems Thinking), and is a certified Transport Canada-compliant UAV operator. oftware Canada is the exclusive Canadian distributor of patented drone automation and roofing analytics software for property insurance.