Can these hovering devices replace insurance claims adjusters?
As flood waters left by Hurricane Harvey across the Gulf Coast of Texas recede, claims inspectors are beginning to assess damages so that policyholders can quickly receive payouts. This time, however, insurers are armed with a modern tool that promises to speed inspection and the claims filing process — aerial drones.
Equipped with high-definition cameras, drones can observe homes and commercial properties from the air when access by land may be limited due to high water or other obstructions. Certainly, those drones will be needed to check the approximately 200,000 homes damaged by a storm that could cost up to $180 billion.
Insurance Inspections From the Air
Several major insurers intend to rely on drones when appraising the destruction caused by Harvey. A spokesperson for Texas’ second largest property insurer, Allstate Corp., told Reuters the insurer aims to launch at least 1,000 drone flights a week once the company’s claim processing system becomes fully operational.
By transmitting photographs back to a claims adjuster in real time, the filing process can begin sooner, Allstate spokesperson Justin Herndon stated. He told Wired that a drone is able to snap the smallest detail, such as a roof shingle, enabling the claims adjuster to zoom in and review the characteristics of the damage.
Similarly, Farmers Insurance, the state’s third-largest property insurer, plans to use drones manufactured by Kespry, a California-based company. Kespry drones are small enough to fit inside a suitcase that a claims inspector can stow into a car trunk. When the inspector reaches the devastated site, he or she launches it using an iPad. According to Federal Aviation Administration rules, the drone must fly no higher than 400 feet and always be in the sight of the claims adjuster. George Mathew, Kespry’s Chairman and CEO, told Reuters that 10 insurance companies have requested his company’s drones to scan properties and process claims.
Tim Murray, a property claims executive at Farmers, noted to Reuters that drones have the potential exponentially speed up claims filing, reviewing as many houses in an hour as a human can in a day. He added that the insurer has a fleet of drones and claims professionals “on standby” ready to dispatch the devices as soon as conditions permit.
Increased Use of Drones
Business Insider found that some 20% of property insurers currently rely on drones to study properties overtaken by natural catastrophes. That percentage is expected to rise as insurers recognize the advantages of using drones in areas ravaged by floods or other natural calamities.
When it isn’t safe to deploy human inspectors, drones enable insurers to gather data about damaged properties. Rather than wait days or weeks for flood-swamped roads to become navigable, drones can fly in immediately to assess damages, relay information to claims experts, and kick start the filing process.
Speeding up the claim process is one reason insurers are on track to increase their use of drones. According to Business Insider, annual spending on drones is expected to rise 50% to $12 billion by 2021, with insurers playing a major role in that increase.
Yet insurers have another powerful incentive to incorporate drones into their operations. With nimble insurtech startups poised to slice deeper into established insurers’ market share, established insurers must adopt innovative technologies to stay relevant and administer modern customer service. Using drones to calculate damages and quicken claims processing provides the insurance industry with state-of-the-art technology to compete with the insurtech phenomenon.