Canadian Underwriter

Flying high: Drone use in insurance

September 16, 2021   by Brooke Smith

Quadcopter drone with 4K video camera flying in the air

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By 2022, 2.85 million small drones will be flying the friendly skies, according to projections by the Federal Aviation Administration.

Our numbers are nowhere near as high. According to Transport Canada, as of Aug. 31, 63,200 drones were registered in this country. There were 59,700 pilots with a basic certificate and 6,350 pilots (mostly flying drones for commercial purposes) with an advanced certificate.

One of those commercial purposes is insurance.

When insurers and contractors in Canada first began using drones, many employed their own in-house drone pilots, said Kabir Shaal, co-founder of Drone Software Canada. But those numbers have dwindled.

“Over time, we noticed there was less interest in in-house pilots and a [still]-developing interest in pilots for hire,” he said. “It has grown tremendously in the last few years.”

The main reasons? Cost of training and equipment, complex regulations, and attrition (pilots often change employment after getting certified). In fact, Shaal said he certified seven advanced pilots for one client; after 18 months, only one of the seven was still with the company.

But whether insurers use their own in-house pilots or hire pilots from a third-party company, drone use has several benefits.

First, it’s safe. Adjusters no longer have to climb a roof. “We go with eyes in the skies and feet on the street,” said Shaal.

Second, scalability. During a peak event, when many drone inspections are occurring, “a single drone operator can ‘feed’ multiple adjusters with precise, consistent data,” said Shaal.

Third, drones are faster than humans. According to Shaal, residential property inspections typically take 20 minutes.

Fourth is currency. “Some insurers have been using satellite imagery for measurement, particularly after cat events,” said Shaal. “It’s highly accurate.” But those satellite images “could be three days, three weeks or three months old,” he said. “And, in a cat event, you want to know the condition of the roof today. Drone imagery provides the current condition of that damaged roof or siding.”

Finally, drones are increasingly being used for pre-loss risk assessments, typically for larger buildings, such as schools, churches, and older commercial and residential buildings.

“There’s a greater interest in condition reports and risk assessments,” said Shaal. “When you get an expensive house or large building that’s being offered by a broker for insurance purposes, companies are now asking us to carry out pre-loss risk assessments of the entire exterior. Drones are great for capturing detailed imagery of hard-to-reach areas.”

This, in turn, can aid in fraud prevention. When there’s a loss, insurers can point to pre-loss images to indicate there was already wear and tear — prior to a weather-related event, for example.

In addition, pre-loss risk assessments may be useful for perfecting cat modelling.

“When an insurer has massive amounts of data related to a specific section of a city or a neighbourhood, that allows them — over time — to build up models of the kind and severity of damage, which will help them with analytics and underwriting.”


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