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The importance of drones in insurance



How drones have changed the insurance landscape

For decades, insurers have relied on traditional, predominantly manual methods of assessment to underwrite insurance policies, determine fair premiums and manage difficult claims. This lengthy process often includes an assessment of the client company’s risk management controls, including safety practices, fire prevention and detection, and incident records, claims history, the overall state of the business, as well as the physical state of the premises, equipment, and structures.

The latter would generally require a thorough physical site inspection with the risk assessor covering most areas of the site, whether for underwriting or claims purposes, by foot. The challenges faced during assessment periods may include:

  • Assessments become time-consuming and sometimes hazardous, as each area is reviewed, photographed and recorded manually
  • Assessments could be more prone to human error, as the risk assessor is required to document the site in his or her reports
  • Not all areas of the site, or those affecting the site, can be fully accessible (such as high rooftops, flare stacks, or neighbouring properties posing potential risks)
  • There may be some degree of uncertainty, where high-risk areas are not fully accessible, and therefore not fully understood
  • Manual assessments are achieved from a human eye-level perspective, where important details can be missed

The human limitations of traditional risk assessments have increased the possibility of inaccurate risk analysis to determine premiums and, in the event of post-loss scenarios, could play a role in fraudulent or inflated claims being approved.

Using drones for insurance inspections

Drones (or ‘unmanned aerial vehicles’/UAVs) have brought about a revolution in insurance inspections, even making the impossible now possible by reducing the uncertainty with increased data on the site. Risk assessors and insurance loss adjustors now enjoy access to an aerial site model of the entire premises from every viewpoint. They’re able to see all features and safety hazards – on repeat, if necessary.

According to Kim James, SACAA Drone Operator and Drone Council SA authority, the benefits of using drones in insurance are numerous:

  • Point of interest videos – The drone’s positioning system allows it to follow an automated path around a particular object, recording video content of the object from all angles
  • 3D models – The drone can capture multiple overlapping aerial images of the feature of interest to create digital models
  • Orthomosaic images – Drones can capture images vertically downward, scaled and geographically correct
  • Thermal imaging – This sophisticated drone feature identifies hidden hot spots or cold spots, allowing inspectors to map risk factors, such as electrical equipment, oil, water or steam
  • Close-up videos and images – Assessors can inspect specific areas more closely, where beforehand, this might have been impossible (E.g.: flare stacks, unreachable rooftop surfaces)
  • Topographic surveys – The drone can capture the contours and terrain of the site, as well as surrounding areas that may also impact risk, such as slope analysis

How could insurers use drones at the different stages of assessment?

Drones increase insurance inspection efficiency by up to 85%. To outline how drones are beneficial to insurers and underwriters across all planes of the insurance landscape, we provide some examples below.

Drawing up a new policy

In this example, an industrial plant requires a policy to cover structures and equipment. The insurer would need to get a very clear understanding of the plant’s structure, including the roof structure.

  • The assessor would obtain and store drone footage of the rooftop and overall structure
  • The assessor can also obtain and record situational information that would impact cover, pricing and potential for pay-out
  • The drone allows the assessor to analyse security risks and proximity to neighbouring risks
  • In the event of a claim during the policy cover period, the claims assessor may access video footage from the initial risk assessment

Renewing a policy

In this example, the same industrial plant is due to renew its policy, and a full inspection of the premises is required to determine any structural or operational changes.

  • The assessor now has the opportunity to compare initial drone footage from the original policy to new footage obtained at the renewal stage
  • The assessor may interrogate all footage to determine if there is any deterioration or new risks present
  • Using drone footage, the assessor and underwriters may adjust the cover, premiums and potential for pay-out more accurately

Processing a claim

In this example, the plant has experienced extensive rooftop damage, which has resulted in massive leaks or exposure to the elements.

  • The drone eliminates the necessity to erect and navigate scaffolding, for the insurance inspector to access the damaged area. This not only saves money but provides a safer option for the assessment team as a whole
  • While a claims inspection could historically take up to two weeks, and multiple visits, a drone will obtain all information required for the claim within two hours
  • The assessor will be able to compare claims footage with the original policy footage to determine actual damage, to ensure an accurate claim


In this example, a plant has suffered damage as a result of a more complex event that originated from a neighbouring property.

  • The drone footage allows the assessor a birds-eye view of the premises and neighbouring premises, providing an accurate view of what has transpired
  • Fraudulent claims comprise about 10% of losses. Drone technology eliminates the room for human error or misleading intervention
  • Assuming that a pre-loss assessment was conducted, the assessor may measure the actual damage with centimetre accuracy, ensuring that the claim is not inflated
  • Pre-loss and post-loss data may be compared, for verification purposes

Crisis Management 

With sufficient lead time, a drone solution can be pre-installed and “activated” to monitor catastrophic events like floods and the spread of fire, thereby alerting responders and communities of imminent or increasing levels of danger. This can be used to safeguard people and assets and provide real-time updates to security, emergency and site management.

Consider the risk prevention applications for an insurer like SASRIA, as well as the early warning benefits to its client if a broad-spectrum solution can be implemented.

Why Indwe has embraced drone technology

Peter Olyott, CEO of Indwe, endorses the technology and the practice of using drones in assessment and underwriting processes, saying, “Drones provide the entire insurance value chain with an innovative way to grow, to select risks more accurately and to add to the growing importance of data analytics to keep and/or create competitive advantages in an increasingly competitive and disrupted environment. We have entered into the Drone Insurance space with our partners UAV Aerial Works with an explicit intent to make this service available to the entire insurance industry in Africa.”

Using drones in our insurance processes allows us to ensure the best service to our brokers and policyholders. This is apparent, through the following:

  • More accurate pricing per client
  • More competitive pricing
  • A greater understanding of our clients’ individual needs
  • More accurate claim pay-outs
  • Faster turn-around on policy commencement and renewal
  • Faster turn-around on claims processes

At Indwe, we aspire to continually innovate our operations, providing exceptional, accurate, and personal service to brokers and policyholders.