Today’s insurance sector faces two negative trends: increasing fraud, and increasing damage from natural disasters.
There are three areas where XM2 can enhance an insurer’s procedures: risk monitoring, risk assessment and claims management (including fraud prevention).
An excellent example of drone applications in the insurance sector is their use in centres for monitoring areas exposed to natural disasters such as floods, droughts, volcanic eruptions or hurricanes. By monitoring threatened areas, national governments working with insurance companies can monitor the situation and alert local residents if an emergency arises. This allows insurers to prevent casualties and major damage, which obviously is extremely beneficial not only for them but also for re-insurers and the rest of society. Monitoring systems should consist of drones combined with a ground-level centre where the data they collect can be analysed. Such systems can help prevent or mitigate the economic consequences of natural disasters, benefiting the entire industry.
Incorporating drones into insurance processes ing assessing risk may have a beneficial effect on many of the aforementioned issues. First, more precise risk management thanks to data from drones can support underwriting processes such as calculating property and casualty premiums. Insurance companies can use drones to gather information about an object or site to capture its initial state before a policy is issued, or even decide to refuse to issue a policy. The information can be combined with data accumulated in more traditional ways for cross-sectional analysis, which can increase efficiency and scoring model precision. Improved calculation of insurance premiums will also improve overall customer satisfaction, by tailoring costs more accurately.
According to the Insurance Information Institute, fraud comprises about 10% of property & casualty insurance losses and loss adjustment expenses every year, which means property-casualty fraud amounts to about $32 billion each year. In addition, 57% of insurers predict an increase in this type of fraud by policy-holders. XM2 have been actively looking for new methods and working with insurance companies to reduce such losses by detecting fraud before claims are paid.
Data gathered by our drones can be used to improve claims management by checking the initial state of a property and its condition after a reported incident. Drones can provide detailed, accurate data allowing for the creation of 3D models of a property / infrastructure, which can serve to assess possibly damaged areas faster, more cheaply and more precisely, as well as providing indisputable documentation to mitigate the risk of fraud. By using drones to assess damage, thus speeding up compensation, insurance companies can also improve customer satisfaction.
Drone operations can enable insurance companies to quickly and less expensively identify insured customers, and evaluate damage. UAVs can collect information on the condition of roads, railways, crops and other factors, and provide key information not only to enhance the process of damage evaluation but also to save lives.
In the future, by combining drones with other disruptive technologies such as machine learning, insurance companies will be able to improve predictions of damage. This will correlate premium calculation much more closely with real threats. By assessing risks better than ever before, insurance companies will be able to set premiums more accurately, ultimately increasing customer satisfaction.