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Drones Cleared For Take-Off

ARTICLE BY

  • James Godden
  • Head
  • Santam Aviation

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At a time when traditional aviation insurance has become static, commercial drones manifest as a legacy-creation force.

The use of commercial drones will have as strong an impact as the mobile phone market has had on life today. So intense will the use be, says the Alliance for Drone Innovation, that sustainable growth will culminate in more than US$82.1-billion by 2025, creating some 103 776 jobs – and that’s just in the United States. “This growth is believable because Santam Aviation has more than doubled the insured number of commercial drones on its books in the past year alone,” says James Godden, Head of Santam Aviation.

In South Africa, the largest drone market on the continent, the commercial use of drones has, however, been sluggish, largely because of regulation that is currently “onerous, restrictive and expensive” according to some commentators. “This is somewhat sad because South Africa was the first in the world to promulgate comprehensive drone regulations, and now that momentum and leadership in innovation has been stunted,” says Godden. “However this is an incredibly lucrative market for businesses and government, the applications of which are evolving continuously, which means extreme care needs to be taken with how to regulate while continuing to stimulate growth and job creation.”

Multiple uses

Commercial drones are largely used in the energy, mining, security, medicine and agricultural sectors. Their use in agriculture specifically has been touted to be one of the most radical industry transformations because they can crop spray 100% of a field faster and more accurately than traditional planes. “They are also far more cost-efficient,” says Godden. “The cost of such a drone is between R200 000 to R300 000, and can provide, in some cases, up to 1 000 hectares of spraying from a battery’s lifetime.”

The commercial drone delivery of life-saving health services is also growing in South Africa. The South African National Blood Service (SANBS) is soon to launch drones delivering blood to hospitals in remote areas, and the South African Medical Research Council (SAMRC) is evaluating their use in the fight against malaria by identifying mosquito breeding sites.

“For inspection purposes, drones are incredibly useful. Not only do they minimise, even eliminate the risks associated with human inspection; they respond quickly to life-threatening situations be they rescue searches or building threats,” says Godden. “This is also true within the insurance industry where drones are becoming popular in undertaking the inspection of claims, fraud detection, and prevention of incidents.”

Drones under cover

Santam Aviation’s commercial drone insurance policy is only applicable to South African Civil Aviation Authority (SACAA) registered drones that are operated by qualified drone pilots who need to have passed a medical examination that defines the operator’s physical competence. Also mandatory is proof of the SACAA’s issuance of a remote pilot licence to operate, which requires theoretical and practical examinations and proof of training. These can only be granted to individuals over the age of 18 years who are also proficient in English. Specific to companies employing the use of drones is the need for a company-operating licence.

The policy ensures cover if a drone is lost, damaged or causes damage, loss or injury to others. To date, says Godden, Santam Aviation drone insurance claims have been largely loss related, either through theft or damage. “Negligence is minimal given the licensing regime, although accidents do happen. Interestingly some of the drone damage claims have been accredited to  birds of prey, particularly the Yellow Billed Kite, which is territorial and obviously finds drones invasive in their environment.”

Drone insurance has been included in Santam’s Aviation’s portfolio for about five years, with the company having had the foresight early on in realising the potential of the industry. “We are seeing developing trends, particularly as more sectors add drone technology to their services. It’s somewhat difficult to know where it is all headed but obviously we must expect ratings to change as growth comes and we begin to better understand the exposures.”

Unlike “pure” aviation, which is static – as Godden says “there are only so many aircraft you can insure and that market is likely shrinking” – the drone market is undoubtedly a legacy-creating force. It’s not inconceivable that in the not too distant future we will have drone air corridors. Not only are they going to transform the viability and ensure sustainability of various sectors, they will be included in all specialist insurance needs, inclusive of marine, heavy haulage, war (under which riots and strikes are covered), hospitality and leisure, real estate and construction, business and personal, and more.

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