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Why insurers are investing more in this technology


May 27, 2020   by Adam Malik


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Accelerated drone usage by the insurance industry is another of the ripple effects that will come as a result of change thanks to the COVID-19 pandemic. The last few months have changed the way people and businesses interact due to physical distancing requirements, thus making contactless drone inspections vital to the way insurers do business, says a report from GlobalData, a data and analytics company.

Its Quarterly Tech Trends survey found that 35% of firms in the insurance industry said they were investing in drone technology — even 68% of them said drones would have a disruptive influence in the property and casualty space, as well as agricultural.

The usage of drones isn’t new to the insurance industry. Adjusters have been using drones to get to areas that people can’t — or get to them soon enough, like a flooded area. Earlier this year, Jeff Sutton, senior vice president of business development and marketing with Claimspro in Toronto, told Canadian Underwriter that taking advantage of drone technology was something that has picked up in the last year to year-and-a-half. GlobalData’s report suggested that adoption will increase more rapidly.

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“Drones are particularly useful for inspecting large-scale and difficult-to-reach infrastructure as well as vast areas of land,” said Beatriz Benito, senior insurance analyst at GlobalData. “The value proposition of drones had centred on the speed and safety they offer in loss adjustments, which ultimately resulted in operational efficiencies and cost savings.”

But in a novel coronavirus world, the benefits of using drones is being highlighted even further. Physical assessments are hampered by social distancing and isolation guidelines. “Keeping human contact to a minimum has not only become important, but sometimes strictly necessary because of lockdowns or parties — loss adjusters, claims handlers or policyholders — self-isolating,” GlobalData’s report said. “This means that walking through a damaged property with a policyholder may no longer be feasible.”

Throw in a natural disaster on top of a pandemic, expect drone technology to be of greater import. “Climate change has worsened extreme weather conditions such as hurricanes, floods and tsunamis as well as non-weather natural disasters like earthquakes, volcanoes, and wildfires,” the report said. “After a disaster during the lockdowns, home insurers can use drones to inspect properties while still social distancing.”

Using drones is also an avenue to save carriers money, Benito observed, which is a significant consideration due the last few months. Customers will see benefits as well in their claims journey.

“At a time when many insurers have been badly hit by the pandemic, technology that has the potential to bring operational savings is likely to lure the industry,” she said. “On the other hand, customers will benefit from quicker claims processing and faster payouts.”

 

Feature image by iStock.com/scanrail



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