Following a spate of insurtech failures, Rebecca Jones, CEO and co-founder of drone technology provider Iprosurv, argues that newcomers need to get real and stop promising the world.
Design or accident
Either by design or by accident, the insurtech community has been positioned as either the disruptors of, or in more recent years, the saviours of the insurance industry.
Which is handy because throughout 2020 it has become clear that however proud we are of our industry, there are huge issues that must be addressed, and quickly. So far, the industry has shown that it cannot find its own way out of the current situation – it needs the energy, the willingness to change and the know-how to make it happen that often only an outsider can bring.
But if the stars are aligned for incumbents and insurtechs to create a new future for the industry, why have we seen so many incomers stumble and fail in the last 12 to 18 months?
In a series of interviews with the founders of failed insurtechs, conducted by Oxbow Partners, every single one said the industry simply wasn’t ready for the change they were bringing and that their big idea hadn’t met current market needs.
Now that may be a catch-all to hide various other failures, but it is very revealing and starts to get to the root of why so many insurtechs fail. It’s fine to have a great idea and vision for the future of insurance but if it isn’t practical, isn’t actionable and doesn’t actually help those in today’s industry do things in a better way, then there is literally no point to it.
Whatever insurtechs aim to do, it has to be grounded in reality to have any chance of being adopted, never mind changing the industry. It seems that too many have been too keen to take on all the problems facing insurance in one go, racing to be the one that delivers the game changer.
But that is like chasing the pot of gold at the end of the rainbow – the game changer exists only in the minds of the deluded. Any new entrant into the market, whether they identify as an insurtech or not, will only make inroads if they are 100% focused on fixing the problems, or enhancing the opportunities, of today.
If they continue to focus on a too-distant future, they will continue to fail. And that doesn’t just damage their business – it damages anyone who seeks to apply new technology to traditional processes.
Because every time distrustful incumbents see another insurtech fail, it reassures them that they were right all along, that they should keep doing things the way they always have. And if that trend continues, we will all have failed.
It’s time for those of us who promise a better future for insurance to get real about those promises. We might see the potential that technology brings. We might get frustrated at those who don’t get it. And we might even think it’s all going to be a waste of time.
But those frustrations are our failures, not the industry’s. They can be addressed by being realistic about the application of the technology we have and rather than taking a technology-first approach, we have to look at what isn’t working or where opportunities aren’t being exploited and only then seek out the technology or approach that can address it.
If insurtechs continue to promise the world and deliver only failure, a real opportunity to change insurance for the better will be lost, perhaps forever. Far better to rein in those ambitions and frustrations and get real about what insurance really needs.
We must first focus on today and only when we’ve cracked that, can we move on to tackling tomorrow.
The use of drones in commercial businesses is increasing, as the number of commercial operators with a license to fly drones in the UK has risen from five in 2010 to over 4,500 in 2018.
Whilst there are numerous risks and safety concerns associated with the use of drones, not least the high profile case of drones grounding flights at Gatwick, in 2018 the speed, cost and sustainability of doing so can allow for a more efficient way for businesses to survey both vast areas and hard to reach places.
A key use of drones is their ability to survey a large area in a short time. In cases of severe damage, for example a large scale fire at a warehouse or building, or damage from extreme weather events and natural disasters, drones are able to scan the area quickly in order to determine the damage caused. Recently, drones have been able to capture images of the damage caused by wildfires in California and across parts of Australia.
In addition, another common use of drones would be to inspect damaged roofs or tall buildings, areas which would be difficult, and costly, for individuals to reach. In doing this, images of damaged areas can be accessed quicker by an insurer, meaning progress of a claim can be much quicker.
While the ability to identify large-scale damage is one benefit of using drones, it is also in cases where damage is known to exist but in places humans can’t access easily, for example equipment breakdown such as boilers that drones also have benefits. With some equipment often being located in tight places, drones can be called upon to access and survey any potential damage that may occur, or may have occurred.
Helping with inspections
Similarly to surveying a damaged area, drones can also be used in the safety inspection of a number of ways. Inspecting roofs, buildings or large areas such as crops and hard to reach equipment are just a small number of ways that drones can provide benefits to insurers before any loss has occurred.
An advantage to being able to take so many high-quality pictures of an area at once for insurers is clear – not only will it reduce the time it takes for images to be taken, but it also presents significantly less risk than if an employed surveyor attempted to take them.
An added benefit of being able to take so many images of an area during inspection, is being able to revisit those pictures when a claim is made, especially in cases of suspected fraud. For example, being able to look back at a picture of a roof that has been claimed to have been damaged in strong winds, can help detect and deter fraudulent claims if there was already damage to a particular area.
As well as reducing cost and risk for an insurer, and in an age of speed and autonomy, being able to access images of damaged areas quickly through use of a drone can lead to claims being processed faster – leading to increased customer satisfaction.
The use of drones in insurance is increasing and there has been a shift in how companies are using technology to improve their processes. As mentioned in Insurance Journal, ‘the last two years suggests that drones and aerial-imagery will soon become commonplace after catastrophes, as well as in other areas for the insurance industry’.
Benefits and Issues
Whilst the benefits of using drones in the insurance industry are clear to see, there are a number of issues that will need to be resolved before their use becomes mainstream. Regulations around their use, including how big they can be, the speed they can fly and the altitudes they can go, continue to be stumbling blocks, as well as the certification and training required to be able to use one proficiently. Cost is another issue, as high quality equipment is likely to cost siginificant money, and that is before the additional outlays on staff training, qualifications and transportation.
The benefits and risks of using drones for businesses are clear, and as mentioned previously there are a number of considerations business need to make in order for them to become commonplace.
Within the claims process, drones can provide insurers with a tool to settle claims quickly and to reduce risk for claims inspectors, meaning it is surely only a matter of time until their use becomes customary.
Article by: Paul Redington Regional Major Loss Manager at Zurich Insurance Company Ltd
The insurance industry is continuing to embrace
drone technology, but commercial drone operators such as Iprosurv still have so
much more to offer our clients and continue to assist and educate our clients
on the benefits of drones, including
better safety, efficiency, faster turnaround time, and reduced costs. Goldman
Sachs estimates the global drone industry to reach $100 billion by 2020. Given
that insurers today are struggling with an increasing amount of damage from
natural disasters and fraud, plenty of insurance companies are aspiring to be
data-driven organizations. PwC reported that drone technology could help the
insurance industry save as much as 6.8 billion USD annually.
Insurance companies are already turning to commercial drone companies. Drones can play a part in all the stages of the insurance lifecycle, especially claims management and fraud prevention. Drone powered solutions also help with real-time insights, risk monitoring, and assessment, as well as improving customer experience during claims and surge events.
Drones can be used to gather data before a risk is insured, to help in preventative maintenance, and to assess damage after an event. They also allow insurers to engage a generalist, rather than a specialist, to perform field assessments and obtain high-quality visuals. The insurer can achieve significant cost savings through improved efficiency, generating the ROI for investing in drones. Insurers are increasingly using drones for property assessments. Used in the Risk environment drones can help policy holder and insurer formulate a maintenance program over the term of the policy or prior to insurance inception.
Accelerate Claim Management
Insurance companies can assess damage quicker and
more efficiently with drone operations by eliminating the need for multiple
site visits. For example, a drone can help a claims adjuster process three
houses in an hour, whereas without one, an adjuster could process only about
three houses in a day (Farmers Insurance). Drones can increase inspection
efficiency by up to 85%.
Data Touch Points
When a claim
occurs, it can involve multiple stakeholders, Loss Adjusters, Insurers,
Forensics, Structural Engineers, Emergency Services, Local Authorities each one
requiring instant visual data to make key decisions in the progression of the
claim or incident, large amounts of data can be obtained by the use of drone
technology, but the use cases don’t stop there, through the use of advanced
analytics and software’s stakeholders can receive the data in multiple use
formats from basic photogrammetry, 3D modelling, BIMM models. Each stakeholder
may use the same data set in a different way dependent on the information they
Drones can particularly play a significant role
while settling agricultural insurances, as they assess the actual yield and
cultivable land. A drone can gather data on 500 to 1,000 acres in less than a
day, thereby reducing the time it takes to settle claims- from days to hours.
Using drones, Drones have been able to survey three times as many acres as an
adjuster on foot and efficiently account for all of a customer’s crop damage.
Improving Customer Experience During Catastrophes
Inclement weather and challenging to reach
locations, make it cumbersome for insurers to reach, which eventually results
in delay and failure to resolve a large number of claims in a given time. Storms
and floods make up large percentage of insured losses. As seen in the aftermath
of Hurricane Irma, 300 high-rise buildings were inspected by GFA Generali
insurance using drones. The process took just ten days, whereas a ground crew
of the same size would have taken several months.
When appraising property claims, claim adjusters
typically encounter hazardous situations. Drone-mapping is a safer inspection
method. Companies like Iprosurv are making drone roof inspection more efficient
and safer by reducing their exposure to accidents and hazardous conditions. With
the implementation of Iprosurvs Major Loss package insurers, loss adjusters,
forensics, structural engineers and local authorities to name but a few can
have access to vital data to asses interim payments and scope of works all this
can be done without attending the initial site visit when the structure is deemed
unsafe to enter or the site is under a strict health and safety cordon due to
the possibility of collapse or injury to personel.
Bespoke Online Portal.
of the art software and technology we are able to deliver large amounts of data
in user friendly interfaces. With the addition of Iprosurv bespoke portal we
are able to deliver large amounts of data in a safe compliant environment with
multiple stakeholders. The system is setup to be an end to end system for our
clients with multiple touchpoints built in.
If you would like to know more about Iprosurv
please do not hesitate to get in touch with us by visiting our website at www.iprosurv.com.
Drones are helping insurers determine causation quicker.
Drones were the subject of unpopular press following chaos at Gatwick Airport in December 2018, where the devices grounded more than 1,000 flights by repeatedly flying over the airfield. However, drones are playing an increasingly important role within insurance, and are becoming particularly prevalent in the investigation and resolution of claims.
From navigating dangerous accident scenes to more quickly establishing the cause of damage, drones can be integral in reducing the time it takes to reach a resolution for the customer.
Across the industry we’ve heard reports of an increase in fires and fire spread over recent years, spanning from electrical faults to health and safety failures.
According to the Association of British Insurers (ABI), 2018 saw the highest number of fire claims since records began, with an incurred cost of £1,298m. The changing nature of warehouse storage (open-plan rather than the compartmentation we saw more readily in the past) means that insurance costs for commercial fires can easily exceed the £1million mark.
Just recently, Allianz Insurance saw a claim for a well-known chain store where fire had spread through a large area, completely destroying the building and the stock stored within. With costs estimated to be almost £3million and the business left without any premises, Allianz dispatched a drone to determine causation and establish the extent of the damage; given the sheer size of the affected area, this would have taken far longer without aerial images.
These images picked up by the drone pointed to the fire starting outside. This allowed our investigators not only to establish the root cause of the disaster, but also to understand the layout of the site. This confirmed that policy conditions had been complied with and that the loss was covered. Speeding up the investigation process also led to securing temporary premises for the business more efficiently, which in turn minimised the extent of business interruption. The use of drones often avoids the need for unsightly scaffolding. Allianz chose to use drones in two recent cases involving roof inspection, recognising that the more traditional methods of scaffolding and construction on a property could have been detrimental to business continuity.
When a fire renders a building too dangerous to investigate, drones can provide a safe means of determining causation without putting humans at risk. Allianz came across a recent case where a fire at a popular highstreet store spread to other premises within a shopping street, rendering the building structurally unsound. The roof of the building had caved in as a result of the fire, and so drone use was the only means of safely investigating causation and policy liability.
Drones are a relatively new innovation but their value in the claims investigation process is already being recognised, in helping to reach a swifter resolution for insurance customers.
We are increasingly finding that utilising properly authorised drone operators can determine cause and cost of fire losses much quicker than traditional methods. This enables us to focus investigation efforts appropriately and make early interim payments to enable our customers’ businesses to move on and recover from even the most devastating losses without unnecessary delays.
https://iprosurv.com/2020/12/07/insuretechs-need-to-get-real-and-stop-promising-the-world/Insurtechs need to get real and stop promising the world
https://iprosurv.com/2020/02/02/drones-taking-off-in-the-claims-process/Drones Taking off in the Claims Process?
https://iprosurv.com/2019/12/09/insurance-companies-continue-to-embrace-drone-technology-but-we-have-so-much-more-to-offer/Insurance Companies Continue to Embrace Drone Technology…But we have so much more to offer!
https://iprosurv.com/2019/11/25/drones-are-helping-insurers-determine-causation-quicker/Drones are helping insurers determine causation quicker