Insurance drones, boots on the ground, and big data
Drones are often touted as being the answer to a great number of modern-day challenges. Soon, we are told, they will be making shopping deliveries for us, dropping off pizzas, and even taxiing us around.
A similar expectation about drone capability has been seen in the world of insurance; allowing insurers easier access to hazardous or difficult to view properties for claims assessment. But this has not happened as widely as might have been expected.
The primary issue is the strict regulation, certainly in the UK, that governs the flying of commercial drones. These controls and associated costs have ensured that commercial drone use for insurance has remained grounded.
The destructive effects of nature have seen this change to an extent. In the event of extreme and extensive property damage through extreme weather it is important for people, businesses and whole economies to begin the process of rebuilding as quickly as possible. This includes a responsibility on insurers to respond quickly and effectively. Obviously drones are a rapid and effective solution to assess such large-scale damage.
With the appearance of drone service models, insurers are less likely to invest in their own drone infrastructure. And the need for both a pilot and an assessor, and the cost that entails, remain.
There are companies that are looking to alleviate these challenges. Our partner WeGoLook have developed a novel solution using a gig economy model and intelligent software. Their insurance proposition works through a platform of agents who collect field data, photos, and videos via the WeGoLook app. The app works by taking and processing images captured from a smartphone, using the data to make assessments of the damage, and feeding this back to the insurer. In this instance, the application does most of the assessing, utilizing artificial intelligence to make judgements on the severity of the damage and the likely cost of repair.
WeGoLook’s approach to assessments highlights another key factor that will be instrumental in whether drones become an effective tool for insurers, the use of artificial intelligence. Drones undoubtedly have the potential to make the collection of vast amounts of data much easier, but the interpretation and practical use of that data by insurers is what counts.
Whether drones will become a critical tool in the insurers’ arsenal is to be seen. There have been some limited successful use cases, where circumstance or geography make them an attractive option, but mainstream adoption is some way off yet. What is certain, for drones and in insurance more generally, is that insurers who do not make proper use of the data they collect will fail. The adoption of intelligent machine learning techniques to process policyholder and claims data is gaining momentum and those that do not take action now will be left dead on the ground as the rest of the industry takes flight.
To learn more about the potential use of drones by the insurance industry, read my Finextra blog.