Insurance Companies Transform their Claims Process with Drones

Create: 09/26/2017 - 19:12
smart insurance drones

REUTERS/Nick Carey

 

The 2017 Atlantic hurricane season has been a rough one so far—and it still doesn’t end until November 30. As of September 18 there have been four named systems, two of which, Harvey and Irma, made landfall in the United States as Category 4 hurricanes, leaving extensive destruction in their wake. In a two-week span these two systems have caused tens of billions of dollars of property damage, leaving insurers scrambling to find enough inspectors in Texas and Florida to help their customers begin the claims process.

In total, catastrophe modeling firm AIR Worldwide estimates that the combined high end of estimated losses from both Hurricanes Irma and Harvey will be in the neighborhood of $100 billion. Sadly, an inspector shortage may spell longer wait times if insurers stick to traditional inspection methods. Fortunately, many insurance providers are leveraging drones to speed up the claims process.

Drone Inspections Winning the Day

The commercial use of drone technology by the insurance industry is ticking upwards. According to PwC, drones could replace over $127 billion worth of human labor and services, with the insurance industry accounting for $6.8 billion of that total.

In today’s data-driven world the high quality information drones can supply—through video imaging, air quality and more—provide insurers’ underwriters and claims adjusters with valuable insights and efficiencies previously out of reach.

Insurance companies have a lot to gain by bringing a drone system in-house. Let’s take a look at the biggest ways that drones improve the adjusting process:

Less Time and Less Money: While large insurers frequently use their own adjusters, small and midsize competitors often hire help from other inspectors who can charge $1,000 to $2,000 per claim for working on areas hit by major storms. No matter their size, when insurers have drones doing the work, it helps remove the need to pay out for additional support. And with new drone technologies—like the Kespry Automated Drone System and Kespry Cloud—there’s also no longer a need to purchase third-party reports to gain access to analytics on the information gathered. Many commercial drones are capable of instantly uploading data to the cloud online, and reports can be generated in hours instead of days.

Improved Productivity and Employee Safety: With drones doing the inspecting, claims adjusters can perform a greater number of inspections per day. Having drones capture information from multiple vantage points means fewer adjusters are physically out in the field, up on roofs or exposed to electrical hazards or other dangerous elements that can result in injury. This not only has a positive impact on adjusters’ productivity, it also reduces workers’ compensation costs and lost time.

More Data and Superior Accuracy: Because drone technology allows for high-resolution imagery from multiple angles, adjusters have a more complete picture of the initial condition of the asset in question and what degree of damage has occurred, which improves the accuracy (and speed) of claim resolution.

Improved Claim Processing Time Leads to Higher Customer Satisfaction: Since drones enable adjusters to process more claims in less time, customers aren’t left waiting as long—which helps a lot, particularly after a natural disaster. Faster claim resolution and more accurate results help adjusters deliver a better customer experience—essential to both maintaining a strong company brand and retaining existing customers.

Fraud Reduction: Fraud accounts for approximately 10% of the property and casualty insurance losses and loss adjustment expenses each year. This is equal to about $34 billion per year in property and casualty fraud. Dishonest customers may take advantage of a random event to claim damages that actually existed beforehand, such as filing a false claim that blames preexisting damage to a roof on a recent storm. With the help of drones that capture clear and accurate images of insured property at regular intervals, insurance providers can better avoid paying out on fraudulent claims.

Looking Toward the Future

Considering all the benefits they provide, it’s not surprising that drone technology is transforming the way the insurance industry runs. It is estimated that by 2020, insurance will be one of the top five markets served by commercial drones. 

About Author

Patricia Schnaidt
Patricia Schnaidt is an expert business technology writer. She has held top publishing and editorial positions at InternetWeek, Network Computing, Windows Magazine and LAN Magazine. Schnaidt has written countless articles, lectured extensively, and authored "Enterprise-wide Networking" (Prentice-Hall). She holds a B.A. in Computer Science from Columbia College, Columbia University.

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