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LAS VEGAS — Drone technology can significantly reduce claims processing costs, but barriers remain to universal adoption by insurers and claims adjusters, a panel of experts said.
Safety and privacy concerns of regulators and the general public have blocked wider use of drones in the claims process, but regulators will likely ease restrictions in the future, and drone operators can take actions to ease other concerns, they said.
Drones began to take off in the insurance claims sector in 2012, said Michael Park, chief product and marketing officer of EagleView Technologies Inc., a Bellevue, Washington-based aerial imagery and data analytics firm.
He was speaking during a session Tuesday at the InsureTech Connect conference in Las Vegas.
Drones can reduce claims processing costs by up to 75% and greatly reduce the time it takes to complete a damage assessment, he said.
“The speed of the actual onsite visit doesn’t require that a homeowner be in the home, and on average our drones take 20 to 30 minutes to fly the whole surface area of a house,” Mr. Park said.
And unlike satellite images of roofs, where one pixel is equivalent to one foot, for drone images one pixel is equivalent to less than one inch, so adjusters have a much clearer view of damage, he said.
To ensure that efficiencies are obtained, insurers need to review how drones can be used in the process “from the ground up,” said Rebecca Harasymczuk, product management leader for claims shared economy strategy, design and delivery with Allstate Corp. in Northbrook, Illinois.
“There are some core things in the process that don’t change,” such as assessing the correct claims payment, “it’s just all the activity around that changed,” she said.
There remain challenges to drone adoption, however, including regulatory concerns over drone use and concerns arising among the general public after well-publicized use of drones as military weapons or events such as the recent disruption of airports due to the use of drones in the United Kingdom, Mr. Park said.
Concerns among the public need to be overcome, particularly privacy concerns, said Anna Gomez, a partner and co-chair of the unmanned aircraft systems practice group at Wiley Rein LLP in Washington.
“You can actually adopt some pretty straightforward things” to address those concerns, she said. “Some of our clients wear vests that say the name of the company and ‘drone operator.’ They put out notices of what they are doing,” so observers know that they are using the drones for legitimate purposes, Ms. Gomez said.
Regulators, including the Federal Aviation Administration and state agencies, are principally concerned that drones are being operated safely and in compliance with regulations, but drone regulations are restrictive, she said.
“It wasn’t that long ago that the use of commercial drones was prohibited,” Ms. Gomez said, but “little by little they’ve been allowing more and more use.”
Drone operators still need to be licensed and must be flown within the line of sight of the operator, among other things, she said.
Regulations will likely be eased, however, as the FAA allows waivers to some operators. For example, the FAA has been accepting waivers for flying at night, and those waivers will form the basis of future regulations regarding night flights of drones, Ms. Gomez said.
Business Insurance presented the 2019 Innovation Awards at the InsureTech Connect conference in Las Vegas.