In November 2020, insurtech Flock – which has pioneered drone insurance in the UK since 2018 – launched a partnership with Sky Future, a drone-based industrial inspection services company. With the commercial applications of drones widening, there will be an increase in demand for drone insurance policies.
According to the most recent GlobalData Quarterly Tech Trends Survey, which was carried out in the second quarter of 2019, 35% of firms in the insurance industry stated they were investing in drone technology. Meanwhile, 68% of respondents expected the technology to have a disruptive influence on the sector.
Drone technology is gradually taking off in the inspection of large areas, particularly in the commercial property space. Flock’s partnership with Sky Future reiterates this trend. These technologies have great risk mitigation potential when detecting repairs. For example, BNSF Railways (the US’s largest railway company) operates Insitu drones to inspect railway tracks. Around 300GB of images are captured at two shots per second, and these images are then overlapped in real-time using AI techniques to enable detection of more than 30 instances of damage at once.
Meanwhile, drone delivery as a service is one of the most anticipated and promising commercial applications of drone technology. Social distancing measures and other restrictions brought about by COVID-19 may accelerate the use of drones for delivery purposes. In the UK, for instance, COVID-19 has increased the need to reduce the cost and transportation time of medical supplies. The crisis has accelerated a drone trial program in the country, which allowed for drones to be used to deliver medical supplies for the first time in May 2020. As commercial use of drones broadens, so will drone insurance products.
GlobalData predicts that over the next two years a number of specialist service companies will emerge, offering a turnkey solution for drone-based surveying, monitoring, and delivery. GlobalData forecasts that the global drone market will grow to $40.7bn by 2028, representing a 9.1% increase from its $17bn value in 2018.
Currently there are two main drone insurance providers in the UK, Flock and DroneInsurance.com. Insurers and insurtechs should increase their efforts to develop products that target this segment of the market – especially as competition is currently low and the potential of the market will only increase.