Drone Technology Soaring in Interest for Insurers
Karen Furtado | July 20, 2015
In early 2014 the first commercially available drone debuted in the consumer market. From the beginning, demand was phenomenal as both professionals and consumers (prosumers) found creative ways to use this new technology. Some of those early adopters were from the insurance industry, including insurers who saw an opportunity for faster claims processing, increased accuracy, and cost reductions. Insurance company staff might point to another valuable benefit of drone usage: safety.
Before drones were commercially available, claims adjusters used ladders and aerial or boom lifts to access roofs and exteriors. These methods were effective but not without drawbacks: the inherent risk in having personnel on roofs; at least two people are required to operate a lift safely; the need for stable, flat ground; height limitations; and both ladders and lifts require storage and transportation to remote locations. Lifts also have substantial associated costs such as fuel, maintenance, and insurance.
Drones (sometimes referred to as Unmanned Aerial Vehicles, or UAVs) offer an attractive, safer alternative with groundbreaking benefits such as precise GPS coordinates and the ability to reach locations that a lift never could, like under a bridge. In terms of cost control alone, drones clearly come out ahead.
The most popular prosumer drones run from $750 to $2,000 and are powered by rechargeable lithium-ion batteries, while prices for an aerial lift start in the five-figure range. Operational costs are also lower: surveying a church steeple in a single 20-minute drone flight is significantly cheaper in person-hours than having two staff on-site to operate an aerial lift for hours, if not days.
Drones bring their own issues, of course. They have physical limitations, such as clear weather and a direct view of the sky for GPS functionality.
Legal issues are still a big question mark: There are currently no federal laws or statutes in the U.S. that specifically apply to drone operation by the general public, although the FAA has sometimes interpreted voluntary standards set in the 1980s for remote-controlled model aircraft to drones.
As fast as technology is advancing, there are still jobs that a drone simply cannot do. Drones cannot operate in restricted airspace: some models do not permit the drone to leave the ground if they are in a banned area. If an adjuster has to physically examine a roof, there is no substitute for a lift.
In general, though, insurers like State Farm, USAA, and AIG are experimenting with prosumer drones because they can make assessment faster, more accurate, and more cost-efficient while keeping employees out of dangerous conditions. These are major benefits for today’s forward-thinking insurers, and we expect that use and acceptance of drones will continue to increase as regulation permits. A timelier and more accurate claims process, improved customer experience, and safer conditions for insurance staff will continue to drive investment as interest in drones continues to rise.
- Enterprise Architecture in an Agile World
- Top 10 Tips for Securing Your Mobile Devices and Sensitive Client Data
- Industry Insight: 4 Global Insurance Trends in Digital, Data, Content Services and Security
- Diving Deeper into Prioritizing Your Strategic Digital investments
- Why Content Rules
- How Mass Personalization Will Open the Small Business Benefits Market
- At Year End 2017, Will Your Organization Be Protected from Cyber Risks?
- Do Insurance Bots Dream of Mitigating Risk?
- Conditioned to Respond
- Managing & Mobilizing Insurance Data in a Connected World
- Race to the Finish Line
- New Tools, New Opportunities in Claims
- ITA LIVE: Reaching Insurance Industry Crossroads
- Advice to Insurance IT Leaders: Keep Your Eye on the Ball
- New Date, Venue for ITA LIVE 2017
- Guidewire Makes Major Push to Small and Midtier Market by Acquiring ISCS
- Insurance Disruption is Happening Right Now
- Insurity Adds Strategic Investment Partner, General Atlantic
- Beyond Transformation: The Convergence of Finance, Risk, and Actuarial Functions
- The Rapid Evolution of Consumer Protection Regulation
- Talent Hunt: Finding, Attracting, Retaining Top People
- Insurers Flexing Their Distribution Models
- Technology Driving Disruption in Insurance
- Fear of ‘Next Bubble’ Challenges Life, Annuity Carriers
- Technology Allows Commercial Lines Insurers to Stand Out
- Single Sign-on Viewed as Biggest Tech Challenge for Agencies
- ISCS Observes 20th Anniversary; Scurto Predicts Major Changes Ahead
- Policyholders and Their First Impressions
- Progressive Making Progress on the UBI Front
- High and Dry: Insurers Search for Disaster Recovery Plans
- Insurers Sign The (Un)Dotted Line
- Reflections of a Retired Insurance CIO
- Mobile Device Management Just One Answer to BYOD Issue
- Lessons from GEICO and Progressive on Winning the Critical Buying Stage
- You Are a Target for a Cyber Attack
- Web-based Systems are the Next Evolution in Claims Technology
- Gaining a “Wow” Experience from Web Users
- Time to Shift from Business/IT Alignment to Business/IT Alliance
- Healthcare Insurers Changing to Consumer Model
- Organization is the Key for Selecting Software Vendors
- Analysts Expound on the Needs of the Mid-tier Insurance Market
- Finding the Cure for Obamacare’s Website
- New Software Solutions Benefit Insurers on the Inside and Outside
- Products, Market Impede Investment in Systems for Life Insurers
- Combatting Cyber Threats: Predict, Prevent, Persist
- The Future of Telematics Heads Beyond Insurance
- The Shame in Cyber Security Lapses
- Building Policy Administration Systems for the Future
- Insurers Look Into The Eyes of Their Policyholders
- It’s a New Dawn for the ITA
INSURANCE IT NEWS
- Tower Selects EIS Group’s Insurance Platform to Drive Transformation
- NTUC Income Selects Majesco Distribution Management and Majesco Digital Solutions to Advance its Distribution Management Operation
- Emerson Reid Modernizes Its Business Processes With VUE Software
- Octo Telematics Powers CAA MyPace™ Pay-As-You-Go Program
- Announcing the Solartis Insure Microservice Hackathon
- DataCubes Completes Plug and Play Tech Accelerator Program
- Medical Mutual of Ohio Implements One Inc Digital Payments
- SUNZ Insurance in Production with Sapiens’ Workers’ Compensation CompSuite® Policy System
The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
ITA is pleased to present the 2014 Webinar Series. We have many topics for you to choose from and attendance is open to all ITA members. The webinar topics are current and exciting — ranging from predictive analytics to telematics and will focus on the direction insurance carriers need to follow for the future. All webinars are presented by insurance IT professionals along with some of the leading analysts and consultants in the field. There is no cost to attend an ITA webinar. For more information and to register for the webinar, click the “title” of the webinar below.
BLOGS AND COLUMNS
It has become a common refrain over the past few years to view the practice of enterprise architecture (EA) as something that time has passed by, much... READ MORE
One important trend in society over the past decade is our increasing ability to create and consume a seemingly unlimited amount of digital content... READ MORE
You have surely heard it said that small businesses are the growth engine for America. Today, the phrase has a special ring to it for benefits... READ MORE
With stagnant growth and lingering low interest rates, the life insurance industry faces a challenging future... READ MORE
Finding insurance carriers willing to write commercial lines risks has always been a challenge for producers... READ MORE
As Guidewire Software prepares for the start of Connections, its 11th annual user conference that begins on Nov. 2, Brian Desmond, chief marketing... READ MORE
Fraud detection has always been and will continue to be a critical component of claims management. Learning the lessons from current claims Straight... READ MORE
- Vendor Views