Drones, a technology that is turning the insurance world upside down
A new player in our airspace, the drone continues to diversify. As a result, the accident rate linked to its use is increasing. So much so that, after several years of work, the European Union has just adopted a first common regulation on the use of the drones, effective from July 2020.
Diversity of use and technical characteristics of drones
Technically, the modularity of a drone means that it can be adapted to any situation, which leads to a diversification of its use. Today, the professional use of these devices is widespread, thus increasing the risks and the diversity of claims.
Although still being used in the audiovisual field, drones are now also present in civil engineering (measurements, controls, and inspections), security (surveillance drones used by fire-fighters, mountain/sea search and rescues, law enforcement or private companies) and agriculture (monitoring of crops, spreading, etc.). Paired with state-of-the-art scientific devices, the drone is also an important research tool, for example at the CNRS.
This diversity of application has been accompanied by an equally broad change to the technical specifications of the machines designed to complete the tasks. Drones are getting smaller and being designed with, for example, anti-shock shields for access to confined or dangerous areas. Conversely, they can also be very big, equipped with multiple motors (6, 8, 16) to enable them to carry even heavier and larger equipment.
Furthermore, drones used by the general public have also undergone significant changes, in particular with an improvement to safety and support elements (anti-collision sensor, parachutes, flight assistance, etc.). So much so that today some models are able to carry out many missions in auto-flight mode, meaning without the direct intervention of the controller.
Impact on insurance
The advent of the drone has forced insurers to be fairly agile in creating their insurance policies. While the first drone regulation came into being in 2012, it was not until 2015 that it was considered from an insurance perspective. The increasing use of drones has been accompanied by new risks, which are not always understandable due to a lack of experience and statistical data on this activity (in PL or Damage).
A number of regulations dedicated to drones were implemented in 2016, improving oversight of this activity. The planned arrival in 2020 of a European regulation, largely inspired by French regulation, will not only standardize the rules between the different Member States of the EU, but also define the different categories of machines, their use, and their registration.
Specifically, the various causes of loss, the technicality of the equipment to be insured and it’s market value are all elements that complicate the assessment of risk for insurance companies. For example, batteries, which are considered consumable accessories for the operation of a drone, are of such technical and financial importance that companies have had to take specific measures in relation to these.
At the same time, insurers are becoming increasingly aware of regulatory compliance by the policyholder in this regard. Thus, they will probably have to play an important role in the verification, compliance, and enforcement of regulatory standards by industry professionals. That is why the need to develop a specific product for this activity has become a reality for many of them.
Use and future of drones in damage surveys
The use of drones in damage surveys has become a reality with the evolution of technology. They increase safety and efficiency. The advantages offered by drones do not stop there: their use results in considerable reductions in the cost of damage surveys and significantly improves the safety of people and property. From a technical perspective, drones provide a new angle of vision and offer new access possibilities to areas that would usually be inaccessible because of their height or dangerousness, making them valuable tools in areas affected by large-scale events.
The emergence of the drone has also been accompanied by a strong desire to innovate. Some companies have begun developing terrestrial drones for different or complementary applications to aerial drones. Underwater drones are also beginning to appear and whilst the fields of application for such technologies are still being defined, the possibilities are immense.
Example of drone use
Within the context of a damage survey of roofs on two hangars covered with photovoltaic panels and affected by a large-scale loss, the use of a drone proved indispensable. By using the drone, there was no need to use an aerial lift or for the loss adjusters to work on a surface that was not intended to accommodate them, therefore ensuring their safety. The roof was therefore surveyed by the drone, providing valuable and necessary information for the work of the loss adjuster who could give instructions to the controller in real-time based on the observations made.
Due to the success and the prospects offered by the use of drones in damage surveys, new models are being studied. Enhanced with a thermal camera or with a 30x zoom, these drones would allow us to achieve even more precision and efficiency.
However, with the development of these new technologies comes a number of costs: training of qualified staff, purchase, and replacement of expensive consumables, servicing, and maintenance, etc. Therefore, target applications assume significant investments and changes in practices that will overhaul current working methods. A change of framework is, therefore, to be expected, both in terms of practices and regulations. This will, therefore, be crucial for the future possibilities offered to stakeholders in the loss adjustment sector.
Sylvain Dupuis, Loss adjuster NICT