Report: Drones Potential Game-Changer for Insurers

Despite regulatory challenges, privacy concerns and a lack of capabilities that could stall their widespread use, drones could have a significant impact on the property/casualty industry.

A recent report from IT firm Cognizant suggests that commercial and personal lines insurers that cover property risks are likely to be early adopters of drone technology. Hat tip to Claims Journal which reports on this story here.

For example, a property adjuster or risk engineer could use a drone to capture details of a location or building, and obtain useful insights during claims processing or risk assessments, Cognizant says.

Drones could also be deployed to enable faster and more effective resolution of claims during catastrophes.

Crop insurance is another area where drones could be used – not only to determine the actual cultivatable land, but also during the claims process to understand the extent of loss and the actual yield, reducing the potential for fraudulent claims.

The findings come amid recent reports that several home and auto insurers are considering the use of UAVs.

The Association for Unmanned Vehicle Systems International predicts that within 10 years (2015 to 2025) drones will create approximately 100,000 new jobs and around $82 billion in economic activity, the report notes.

Cognizant believes now is the time for insurers to consider the opportunity that drone technology presents, especially in the areas of claims adjudication, risk engineering and catastrophe claims management:

With drones poised for commercial use, insurers could use them specifically to help reduce operational costs and gather better-quality information. This could help improve the productivity, efficiency and effectiveness of field staff (e.g. claims adjusters and risk engineers), and improve the customer experience by resolving claims faster, especially during catastrophic events.”

Cognizant goes on to note that drone enhancements such as artificial intelligence, augmented reality and integrating audio, text and video already exist in some shape or form. Insurance carriers should expect to see the adoption of drones increase significantly as these features are integrated into standard drones, and as regulations for commercial use of drones are defined.

It concludes:

As insurance carriers build business and technology use cases and the necessary architecture and services, they must consider not only how and where drone technology fits into their digital roadmap but also how the operating model can be enhanced to deliver optimal benefits for the business and its customers.”