The impact of the COVID pandemic will have insurers reaching for technology as they look at ways to reduce costs and increase efficiency.
Analysts GlobalData has said drone usage within the insurance industry is expected to be accelerated due to the impact of COVID-19.
It added the pandemic will change the way people and businesses interact and contactless drone inspections will become even more valuable to the insurers.
The firm has issued its latest Quarterly Tech Trends survey, which found 35% of firms in the insurance industry revealed they were investing in drone technology. However, a larger proportion of firms (68%) expect the technology to have a disruptive influence on the sector.
While it was anticipated that drone technology would eventually take off in the inspection of large areas – namely, in commercial property and casualty insurance, as well as in the agricultural space. Coronavirus is highlighting more than ever the benefits that the technology can bring to the industry as a whole.
Beatriz Benito, Senior Insurance Analyst at GlobalData, explained: “Drones are particularly useful for inspecting large-scale and difficult-to-reach infrastructure as well as vast areas of land. The value proposition of drones had centred on the speed and safety they offer in loss adjustments, which ultimately resulted in operational efficiencies and cost savings.”
However, GlobalData added physical assessments are much less viable in the era of COVID-19, social distancing and quarantine measures. Keeping human contact to a minimum has not only become important, but sometimes strictly necessary because of lockdowns or parties – loss adjusters, claims handlers, or policyholders – self-isolating. This means that walking through a damaged property with a policyholder may no longer be feasible.
Drone technology will become more widespread in insurance as natural disasters hit different geographies. Climate change has worsened extreme weather conditions such as hurricanes, floods, and tsunamis as well as non-weather natural disasters like earthquakes, volcanoes, and wildfires. After a disaster during the lockdowns, home insurers can use drones to inspect properties while still social distancing.
Mr Benito concluded: “At a time when many insurers have been badly hit by the pandemic, technology that has the potential to bring operational savings is likely to lure the industry. On the other hand, customers will benefit from quicker claims processing and faster payouts.”